Technical Analysis: Federal Bank, PNC Infratech and Shanthi Gears

Posted on by

I have shares of Federal Bank purchased at ₹194. What is the long-term outlook for the stock?

Sanjay Kaimal

Federal Bank (₹198): The stock has been in a strong uptrend since April 2020. This uptrend is intact and there is room to rise further. Intermediate resistance is around ₹205, which is holding as of now. A near-term dip to ₹190 is a possibility. There are chances of seeing a consolidation between ₹190 and ₹205 for a month or two. But the overall trend will remain up. We can expect the stock to breach ₹205 eventually. Such a break can take Federal Bank share price up to ₹240 by this year-end.

The region around ₹240 is a strong long-term resistance. Considering the uptrend since 2020, the chances are high for it to halt around ₹240. So, you may have to look for exiting the stock at this level. You can consider accumulating the stock at ₹191. Keep a stop-loss at ₹182. Trail the stop-loss up to ₹203 as soon as the stock moves up to ₹220. Move the stop-loss further up to ₹225 when the price touches ₹232. Exit the stock at ₹238.

I have PNC Infratech stock bought at ₹550. What is the technical outlook for this stock?

Swaroop

PNC Infratech (₹485): The stock has been oscillating between ₹450 and ₹550 for more than two months now. But this looks like a consolidation within the broader uptrend. There is good support in the ₹440-435 region. As long as the stock stays above ₹435, there is no threat for the current uptrend. PNC Infratech share price can rise to ₹650 in the next two-three quarters. You can buy more on dips at ₹470 and then at ₹445. Keep the stop-loss at ₹405. Move the stop-loss up to ₹530 when the share price goes up to ₹580. Revise the stop-loss higher to ₹605 when the price touches ₹630. Exit the stock at ₹650.

There are chances for the stock to continue the current sideways consolidation for some more time. So, you may have to wait patiently to get the expected rise to ₹650. Also, the bullish view will go wrong if the stock declines below ₹435. If that happens, PNC Infratech share price can fall to ₹380-370. So, if a break below ₹435 happens, you will have to adhere to the stop-loss and exit the stock.

I have shares of Shanthi Gears. My average purchase price is ₹161.50. Kindly let me know the long-term outlook, say for about three years.

Viswanathan

Shanthi Gears (₹621): The stock has seen a multi-fold increase from your purchase price. The share price touched a new high of ₹703.55 last month and has come down from there. The trend has been up and is very strong. There is no sign of a reversal yet. It is very important for you to protect your profits. The stock has strong support in the ₹550-530 region and then around ₹480. A corrective fall to ₹550-530 in the short term cannot be ruled out. However, the chances are high for the stock to sustain above ₹530 and keep the uptrend intact.

As seen from the chart, there is potential to target ₹850-900 on the upside. You can keep a stop-loss at ₹510 for 50 per cent of your holding. For the balance, keep a stop-loss at ₹465. Revise the stop-loss up to ₹640 for the entire holding when the price goes up to ₹780. Exit 50 per cent of your holding at ₹820 and keep the stop-loss for the remaining at ₹780. Book profits on the balance holdings at ₹860.

Send your questions to [email protected]