I would like to invest in Tech Mahindra shares. What are the technical prospects for this action?
Tech Mahindra (INR 1,114.55): There is an early sign of a bottom in Tech Mahindra shares. The stock touched a low of INR 914.67 in June and has been trying to rally. This ₹914 level was an important long-term trendline support at that time. Currently the support for this trend line is INR 940. The 61.8 percent Fibonacci retracement support is at ₹950. The key resistance is ₹1,200. A decisive break above it will confirm a trend reversal and take Tech Mahindra to ₹1,450-1,500. It will also leave the door open for the stock to target ₹1,800-1,850 from a long-term perspective, say a few years.
Assuming you are a long-term investor, buy Tech Mahindra at current levels. Accumulate on dips of INR 1060 AND 980. Keep the stop-loss at INR 770. Follow the stop-loss till ₹1,170, when the stock rises to ₹1,340. Move the stop-loss further to INR 1450 when Tech Mahindra touches INR 1600 on the upside. Exit the stock at INR 1,780. Note that before a break above ₹1,200, chances of a sideways move between ₹950 and ₹1,200 for another quarter or two. So you will need patience.
I bought shares of TTK Prestige at an average price of INR 1010. The share price has been falling for the past few weeks. Should I hold the stock or exit with minimal loss?
K Jayasekar, Chennai
TTK Prestige (INR 881.9): The long-term trend was up for TTK Prestige shares. There is strong support at INR 820 and INR 770. Further decline to INR 820 test cannot be ruled out. However, we see high chances of the stock holding above INR 820. A fresh leg of rally, thereafter, may break the resistance at ₹ 1,050 and take TTK Prestige up to ₹ 1,250 and ₹ 1,350 in the longer term.
Assuming you are a long-term investor, we suggest you hold onto the stock. Buy more on dips for INR 850. Keep the stop-loss at INR 790. Move the stop-loss to ₹1,020 when the stock moves to ₹1,110. Revise the stop-loss further to ₹1,150, once the stock touches ₹1,260 on the upside. Exit the stock at INR 1,320. In case your risk appetite is very low and you have no room to accumulate on the dips and you have a wide stop-loss, then you can consider exiting at the current level itself.
I hold shares of Suven Life Sciences. Please let me know about the upside potential. Should I keep the shares or sell them?
T Meena, Hyderabad
Suven Life Sciences (INR 63.50): The stock has been in a strong decline since last October. No sign of bottom yet. So the downtrend is very well intact. Support is 54 INR. So there is still room left for stocks to fall from here. Strong resistance is in the broad region of INR 70-75. Suven Life Sciences will have to rise decisively above ₹75 to confirm a trend reversal. Only then chances of revisiting INR 100 levels will arise again. However, looking at the price action on the charts, a break above ₹75 may not happen anytime soon.
It will take a strong trigger for Suven Life Sciences to cross ₹75 from here. It is preferable to see a dip to ₹54 first and then a decline. Although you have not mentioned your purchase price, we suggest you to exit the stock at the current level even if it is in loss. You can consider reinvesting the sale proceeds in some other good stocks.. Maybe you can consider Tech Mahindra explained in the previous query.