What is the technical outlook for Mphasis? I would like to buy for short-term horizon.
Ashish Pathrabe
Mphasis (₹1,911.3): The stock of Mphasis began to decline in the past week after recording a new high at ₹2,008 in late April this year. Since bottoming out in March 2020 from ₹630 the stock has been in a long-term uptrend. Medium as well as short-term trend are also up for the stock. Recently, the stock breached a key resistance at ₹1,800 and recorded a new high. But it has started to decline on the back of profit taking. Although the stock is trending up, the weekly relative strength index is charting lower, displaying a prolonged negative divergence, implying trend reversal is on the cards. Therefore, investors with a short-term perspectiveshould tread with caution at this juncture.
A fall below the immediate support level of ₹1,800 will pull the stock lower to ₹1,700 levels. An upward reversal from these supports can take the stock higher and can keep it in a sideways range between ₹1,700 and ₹2,000 for a while. On the upside, a decisive rally above ₹2,000 can reinforce the uptrend and take the stock northwards to ₹2,200 and then to ₹2,400 over the medium term. But a fall below ₹1,700 can alter the short-term uptrend and pull the stock lower to ₹1,600, which is a key medium-term support to note. Investors with a long-term perspective can stay invested with a fixed stop-loss at ₹1,250 levels.
Can I buy shares of Venky’s India at current market price?
TVS Prakash Rao
Venky’s (India): The stock jumped 13.5 per cent in the past week and closed at ₹2,675.6 levels. In early April this year, the stock moved out of the sideways consolidation phase and broke through a significant long-term resistance at ₹2,000 and continued to trend upwards. However, the stock is witnessing selling interest now as the daily indicators are featuring in the overbought territory. The daily relative strength index is showing negative divergence, indicating a trend reversal is likely. Hence, traders should remain cautious at this level and avoid buying the stock.
A fall below the immediate support level of ₹2,400 will alter the near-term uptrend and pull the stock down to ₹2,200 and then to ₹2,000 in the ensuing weeks. Further declines below ₹2,000 will alter short-term uptrend. In that case, the stock can decline to ₹1,800 and then to ₹1,600 levels.
After a corrective decline, the stock can trend upwards and breach the immediate resistance at ₹2,800. Subsequent resistances are placed at ₹3,000 and ₹3,200 levels. Await correction and buy at lower levels with a stop-loss at ₹1,600.
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