Technical Analysis: Tata Power, Delta Corp, and Polyplex Corporation
I have shares of Tata Power bought at ₹290. Please advise whether to hold this stock or exit.
Sanjay
Tata Power (₹259): The trend has been up since May 2020. After an intermediate correction, the stock of Tata Power has resumed its uptrend in April this year. Support is in the ₹230-220 region. Moving Average crossover on the weekly chart strengthens the bullish case. It also signals that the downside could be limited as fresh buyers can come into the market. Tata Power share price can rise to ₹290-300 — the next important resistance zone over the next one-two quarters. A decisive break above ₹300 can take Tata Power share price up to ₹370-400 in a year.
If you can wait for the above-mentioned time frame of one year, then hold the stock. Consider accumulating at the current levels and also at ₹245, if a dip is seen. Keep a stop-loss at ₹215. Move the stop-loss up to ₹295 when the price reaches ₹320. Move the stop-loss further up to ₹330 when Tata Power share price touches ₹370. Exit the shares at ₹390. Please note that the region around ₹400 is a strong resistance. So, exit the stock at ₹390 rather than waiting for higher levels.
I hold Delta Corp shares. My purchase price is ₹304.50. What is the outlook for the stock? Can I accumulate and average at current levels? If no, then where should I exit?
Naveen Kumar
Delta Corp (₹137.75): The stock has been beaten down badly over the last three months. The stock has tumbled over 45 per cent from a high of about ₹260 made in June this year. The outlook for the stock is still bearish. Delta Corp share price can fall up to ₹85 from here. To avoid this fall, the stock price has to rise above ₹190 which looks unlikely. So, rather than accumulating at the current levels and waiting for the share price to go up, we suggest you exit the stock and accept the loss.
This may not be an easy decision. But this would be a good learning for the future. We would like to reiterate that whenever you enter a position, have a risk management strategy in place. That is, always have a stop-loss right at the time of entering a stock. There is a myth that stop-loss is only for traders. It is not so. Entering a position with the right risk management system will help avoid huge loss.
I have purchased shares of Polyplex Corporation at ₹1,635 per share. I am a long-term investor. Should I accumulate at current levels, exit with a loss now or simply hold and wait? Please advise.
A R Ramanarayanan, Chennai
Polyplex Corporation (₹1,155.95): The stock has been witnessing some wild swings over the last three years. The price sky-rocketed from about ₹237 in March 2020 to a high of ₹2,756 in April 2022 and then has tumbled to the current level of ₹1,155. However, on the charts, there are significant supports at ₹1,100, ₹1,000 and ₹900. So, there is not much room for fall from here. Also, the price action since July this year indicates that the pace of fall has reduced. So, the chances of seeing a reversal anywhere from the ₹1,100-900 region is very high.
But can Polyplex Corporation share price go back up to ₹2,500 levels again? That is not very sure. However, we can get a rise at least up to ₹1,600 or ₹2,000 assuming that the bounce would be strong. You can consider accumulating now and at ₹1,050. Keep a stop-loss at ₹850. Move the stop-loss up to ₹1,430 when the price moves up to ₹1,600. Move the stop-loss further up to ₹1,780 when the price touches ₹1,880. Exit the shares at ₹1,950.
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