Technical Portfolio Guide
BHARAT PETROLEUM CORPORATION LTD.
CMP : Rs433.85
BSE Code : 500547
Disinvestment was the talk of the town early in the year and in anticipation of a good move due to divestment in BPCL, I had purchased its 300 shares. Though the stock rallied after that, now it’s back to my break-even point. Should I hold or exit?
- Satyajit Mazumdar
MAINTAIN A STOP-LOSS OF RS 400-RS 404
The disinvestment news is not new as this was doing rounds last year as well. While investing in any stock, avoid news factor as criteria. The price and the fundamentals are essential. Fundamentally, it is not so attractive as the sales are declining for the last six quarters. The return on equity (RoE) is as low as 8. The FY20 EPS declined to Rs 13.64 from Rs 36.26. Technically, the stock is forming a very long triangle. It is trading between Rs 250-Rs 545 range for the past five years. The price formed a parallel top at Rs 480. It is also forming the higher bottoms. The price is between 50 and 200-DMAs. The 50-DMA is acting as resistances while the 200-DMA as support. In the short term, a move above 50-DMA is positive while a decisive close above Rs 433-Rs 440 is a big positive. Above this zone, the target is at the parallel high of Rs 481. A decisive weekly close above Rs 481 would result in a very big breakout for the longer term. However, in any case, if it falls below Rs 404-Rs 400 on the weekly closing basis, it’s a big negative. We suggest maintaining a stop-loss at this zone of support.
BARBEQUE-NATION HOSPITALITY LTD
CMP : Rs592.10
BSE Code : 543283
What are your views on the recently-listed stock of Barbeque Nation Hospitality? Is it a good time to buy?
- Rohan Goswami
AVOID FOR NOW!
This is a newly-listed stock, which does not have much price history; so, analyse tech-nically. Generally, any newly-listed stock will form a cup & handle or a cup pattern. Post the listing, the stock is steadily falling in that process. As long as it does not break the low of the listing day Rs 481, this rule applies. At the same time, the BUY signal triggers only at cup pattern breakout. It may take at least another 3-4 months to form and break out of the cup or cup & handle pattern. As per the current structure, the breakout point will be roughly at Rs 720-Rs 833 zone. Meanwhile, if you can find out a bottom formation and a breakout of a bottom, it is also a chance to enter the stock. Till then, better avoid and wait for a good entry point.
HINDUSTAN UNILEVER LTD.
CMP : Rs2,389.05
BSE Code : 500696
Is this a good time to accumulate the stock of Hindustan Unilever?
- M SRIRAM
REDDYACCUMULATE THE STOCK WHEN IT COMES AROUND 200-DMA
Technically, the stock is consolidating between Rs 2,000-Rs 2,614 for the past 56 weeks. The stock is forming higher lows & higher highs but failing to sustain at higher levels or breaking the range. It is trading nearly 8 per cent to the pivot or lifetime high. The stock is also trading above the 50-DMA and 200-DMA. Currently, for the last ten days, it is hovering around the 20-DMA. The stock took support at the zone of 50 of RSI and bouncing for the last four years on the weekly chart. The point of concern is that there is a negative divergence in the RSI on the weekly & monthly charts. Barring March 2020, the stock is moving in a perfect uptrend since 2004. If you are looking for a long-term investment opportunity, you can apply two strategies. Firstly, you can buy the stock when it moves above the previous swing high, with a 50-DMA as a stop-loss. Secondly, you can accumulate the stock when it comes to 200-DMA support with a prior swing low as to stop-loss. Do not look at short-term moves. It is stock to be in a defensive portfolio.
NATCO PHARMA LTD.
CMP : Rs943.20
BSE Code : 524816
Please share your view on Natco Pharma for the short-term?
- Inderjit Singh
AS LONG AS THE STOCK TRADES ABOVE RS 880, BE WITH A POSITIVE BIAS
The stock is consolidating for the last 31 weeks between Rs 722 and Rs 992. It is trading above the short and long-term averages. The 50-DMA is about to move above the 200-DMA, which is known as a golden crossover. For the last two weeks, the volumes recorded are above average. The weekly MACD has given a buy signal and is above the zero line. The ADX (20.52) shows a moderate strength in trend. Its relative price strength is at 40 and improving. Its 20-period RSI took support at 50 zone and is bouncing. The moving average ribbon on the weekly chart is beginning to trend up. Besides, Pring's KST is about to give a buy signal. The Elder impulse system shows that the stock is in a neutral zone. As long as the stock trades above Rs 880, the positive bias will continue. A weekly close above Rs 992 is a consolidation breakout. You can add the aggressive position above this level. It can test the previous high of Rs 1,090 in the short-term and Rs 1,452 in the medium-term.