I am holding shares of Reliance Industries. My average price is ₹2,565. What is the outlook for this stock? Should I hold or sell at current levels?
Vipul Shah, Mumbai
Reliance Industries (₹2,385.05): The short-term outlook is not looking good for the stock of Reliance Industries (RIL). The stock has been oscillating between ₹2,300 and ₹2,800 for more than a year. For the short term, ₹2,500 is a very strong resistance. As long as RIL trades below this resistance, a fall to ₹2,200-2,100 cannot be ruled out. The downside can extend even up to ₹2,000. We can expect the RIL share prices to reverse higher anywhere from the ₹2,200-2,000 region. That reversal can take the prices up to ₹2,500-2,600 thereafter.
An eventual break above ₹2,600 will then pave the way for a target of ₹3,200-3,300 from a long-term perspective. If you can hold it for a long term, then buy more at ₹2,250 and ₹2,150. Keep a stop-loss at ₹1,950. Move the stop-loss up to ₹2,550 as soon as RIL moves up to ₹2,700. Move the stop-loss further up to ₹2,950 when the stock touches ₹3,050. Exit the shares at ₹3,280.
What is the outlook for Tata Power?
Tata Power (₹207.70): The price action since the last week of December indicates a base formation above ₹200. Strong support is in the ₹200-195 region. Immediate resistance is at ₹213. A break above it can take the Tata Power share price up to ₹225 and ₹235 initially. A further break above ₹235 will then pave way for a fresh rally to ₹280-290 over the long term. If the stock fails to break above ₹213 immediately, it can continue to oscillate in the ₹195-215 range for some more time.
If Tata Power breaks below ₹195, it can fall to ₹180-175. A fall beyond ₹175 is less likely. Investors with a long-term perspective can buy Tata Power shares at current levels. Accumulate at ₹198. Buy more at ₹185 if a break below ₹195 is seen. Keep the stop-loss at ₹165. Move the stop-loss up to ₹220 as soon as the stock moves up to ₹245. Move the stop-loss further up to ₹250 when the stock touches ₹265. Exit the shares at ₹280.
Can I buy Ujjivan Small Finance Bank (SFB) at the current levels?
Ujjivan SFB (₹27.29): The near-term outlook is not looking very strong for the stock of Ujjivan SFB. Immediate resistance is at ₹28 and ₹29. As long as the stock trades below these resistances, it looks vulnerable. A fall to ₹24-23 is possible from here. Key resistance is at ₹31. The stock has breached ₹31 decisively to gain bullish momentum. Such a break can trigger a fresh rally targeting ₹43-44 over the long term. However, for now, it is not clear whether the stock will rise above ₹31 from here itself or after one more leg of fall to ₹24.
So, consider the following strategy. Buy 30 per cent of the intended amount you plan to invest at current levels. Buy the balance 70 per cent when the price falls to ₹24.50. So the average entry price will be around ₹25.35. Keep the stop-loss at ₹19. Move the stop-loss up to ₹28 when the share price goes up to ₹34. Move the stop-loss further up to ₹35 when the price touches ₹39. Exit at ₹42.
Send your questions to email@example.com