Tech Query: Is Bata India hitting rock bottom?

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I bought shares of Bata India at an average purchase price of ₹1,825. What are the prospects for this title? My investment horizon is two years.

PV Ramana, Guntur

bata india (₹1,678): Structurally, the stock has been in an uptrend with an intermediate correction. The price has come down over the past year. There is room for Bata India stock prices to fall further from here. A strong trendline as well as the 200 week moving average support lies at ₹1,560. Below, ₹1,460 is the next strong trendline support. Chances are high for Bata India to reverse from ₹1,560 itself. The price action over the past three years is in the form of an uptrend channel and the ₹1,560 level is the lower end of the channel. This makes it a very strong support and difficult to break.

As such, the expected rally of around ₹1,560 will have the potential to push prices up to ₹2,500 over the next couple of years. You can consider buying more at ₹1,580 and also at ₹1,480 in case the drop extends beyond ₹1,560. Keep a stop-loss at ₹1,420. Follow the stop-loss to ₹1,935 as soon as the stock rises to ₹2,120. Move the stop-loss up to ₹2,240 when the price of Bata India touches ₹2,420. Exit from stock at ₹2,480.

I have shares of PC Jeweller. What are the prospects for this title?

Ganesh Shanmugam

PC Jeweler (₹80): The stock has started to rally since July this year after being stuck in a narrow move for more than two years. However, the bullish outlook is not convincing. On the daily chart, a rounded pattern formation at the top is visible. This is a bearish pattern. On the weekly chart, the steep decline over the past three weeks indicates that the stock is lacking strong new buyers at higher levels. Although there is support at ₹72 – the 21 week moving average, the overall picture is still weak. The stock will need to hold above ₹72 and break above ₹105 in order to reinforce the bullish scenario.

Since you haven’t mentioned your purchase price, it’s hard to give good advice. However, given the price movement and the low chances of the stock having a convincing rally, we would suggest getting out of the stock even if it is losing. You may consider reinvesting the proceeds from the sale in other good stocks that look very strong on the charts. Maybe you can consider buying Bata India and follow the strategy explained in the previous question.

I hold shares in Sequent Scientific Ltd. My average price is ₹162. Should I hold the stock or exit with a loss? Please advise.

salam khan

Sequential scientist (₹92): The stock has been in a strong downtrend since July last year. The downtrend is intact. There is room for the stock to fall further from here. However, on the long-term charts, strong supports appear. Moving average support is at ₹70.40 and long-term trendline support is at ₹65.50. Chances are very high that the current downtrend finds a bottom at one of the two support levels mentioned above. A further rally to around ₹70.40 or ₹65.5 will have the potential to see the ₹300 levels again in the next two or three years.

Assuming you are a long-term investor, we suggest you hold the stock. Accumulate more at ₹73 and ₹67. However, a prolonged sideways consolidation and base formation between ₹70 and ₹130 is a possibility before a strong rally occurs. You will therefore need to be patient. Keep the stop-loss at ₹59. Revise the stop-loss to ₹110 as soon as the stock rises to ₹145. Move the stop-loss to ₹210 as soon as the stock touches ₹270. Accounting profit at ₹305.

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