Technical Analysis: Gujarat Gas, Precision Wires India and Bharat Dynamics

I have bought Gujarat Gas at ₹614. Please guide me on what to do next. Should I book my loss? Or, is there any scope for the stock price to move up? I can wait for one-two years.

Dr R K Tandon

Gujarat Gas (₹419.20): The stock has been in a strong downtrend since September 2021. There is no sign of a reversal visible on the charts. So, the downtrend is likely to remain intact for some more time. Strong resistance is in the ₹450-470 region, which is likely to cap the upside. The stock has to breach ₹470 first and then surpass the ₹500-mark to become convincingly bullish. That looks unlikely at the moment.

We expect the upside to be capped at ₹470 itself. Important supports are at ₹370 and then near ₹335. So, Gujarat Gas share price has still more room to fall to at least ₹370, if not ₹335. After that, there is a possibility of a trend reversal. Accumulating on dips and then waiting for the stock price to revive does not look like an ideal option. So, we suggest you to exit the stock at the current levels and accept the loss.

I have been holding the shares of Precision Wires India for more than a year now. What is the outlook for this stock?

Jai

Precision Wires India (₹121.25): The long-term trend has been up. Within its uptrend, the stock has been in a corrective fall since mid-October. The trend is still up. Strong support is in the ₹106-103 region and then near ₹100. As long as the stock price remains above ₹100, the uptrend will remain intact. Immediate resistance is at ₹125. Above that, ₹140 will be the next important resistance. Since the stock price has seen a strong surge, there are good chances to see a consolidation for some time. The consolidation range could be ₹100-140.

A breakout on either side of ₹100-140 will then determine the next leg of move. That might take some time. You have not mentioned your purchase price. Assuming that you would have bought it around ₹80, we suggest you to keep the stop-loss at ₹95 and hold the stock. Move the stop-loss further up to ₹115 when the price touches ₹130. Exit the stock at ₹140.

I have Bharat Dynamics shares purchased at ₹1,047. What is the outlook? Should I continue to hold or book loss and re-enter the stock again at lower levels?

Bhaskar Parab

Bharat Dynamics (₹1,039): The stock had failed to breach the ₹1,200-mark in its several attempts made since June this year. Although Bharat Dynamics share price fell to ₹901 last month, it has managed to recover well from there. The ₹950-900 is a very crucial support for the stock which is holding well for now. The stock has to fall below ₹900 to indicate a trend reversal. Until then, the uptrend will continue to remain intact.

If the bounce from the low of ₹901 sustains and a subsequent rise past ₹1,100 is seen, the stock can revisit ₹1,200-1,250 levels in the coming weeks. If your risk appetite has room to withstand the loss, then keep a stop-loss at ₹880 and hold the stock. Move the stop-loss up to ₹1,040 as soon as the stock goes up to ₹1,140. Move the stop-loss further up to ₹1,120 when the price touches ₹1,170. Exit the stock at ₹1,200.

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