Technical Portfolio Guide

SANGAM (INDIA) LTD.

CMP: Rs392.65
BSE Code:514234 

I have bought the shares of Sangam (India) Ltd near its 52-week low. Please suggest what should I do and also, let me know the revised stop-loss.
- Shridhar Bhat

HOLD THE STOCK WITH A STOP-LOSS OF RS 325 ON A CLOSING BASIS
You must have bought at around the level of Rs 70-Rs 75, which means you are already sitting with a decent profit. Last month, the stock broke out from its 56-month long cup pattern, which has a depth of over 90 per cent. Thus, the stock has the potential to surge about 90 per cent in the medium to long term. Moreover, in the past few weeks, above-average volumes have been recorded, which suggests buying interests among the market participants. The technical parameters on the daily timeframe hint towards bullishness too, as the RSI is in the bullish zone while all the key moving averages point upwards, which highlights the strong potential of the stock. Moreover, the stock trades above all the key short-term as well as long-term moving averages. Thus, you can consider holding this stock as there is no strong reason to exit. However, Rs 325 happens to be a critical support zone for the stock as it is the breakout level of the cup pattern. Stock closing below this level shall mean weakness and it is the right time to consider exiting the stock.

WIPRO LTD.

CMP: Rs615.35
BSE Code:507685

I had bought the shares of Wipro at an average price of Rs 720. Now the stock is trading at Rs 620. Please suggest what to do.
- Hemakshi Rathod

CONSIDER AN EXIT FROM THE STOCK AT CMP.
Wipro, which is one of the leading companies in the IT sector, has provided good returns to its shareholders in the past. However, a recent slump has caused the stock to correct nearly 15 per cent. On the weekly chart, the stock has formed a double top-like pattern, which is a bearish sign. Along with this, the technical indicators point towards the bearishness as the MACD line on the daily timeframe has fallen below the zero line and the signal line. RSI, too, trades below 30. Also, Elder Impulse system has indicated the bearishness of the stock. Moreover, the volume recorded in the past few days is more than the 50-day average volume, which suggests selling pressure in the stock. With technical parameters and price action indicating bearishness, you can consider an exit from the stock at the current market price. 

ALKALI METALS LTD.

CMP: Rs136.05
BSE Code:533029

I am holding 200 shares of Alkali Metals at Rs 101.50 for the short term. What should I do now?
- Rohit Bhore

HOLD THE STOCK WITH A STOP-LOSS OF RS 133
The stock is extremely bullish as it has scaled over 50 per cent in just two weeks. In the short and the medium term, it has outperformed the sector as well as its peers by a huge margin. The stock has been hitting the upper circuit in the past four trading sessions. With such a strong price movement, the technical indicators point towards extreme bullish sentiment. The trend indicator ADX is rising above 36, which suggests a strong uptrend of the stock. Along with this, +DMI is well above –DMI, which suggests strong potential to surge higher. The stock is already trading at a 52-week high and is showing no signs of bearishness. Thus, you can continue to hold the stock. However, in case the stock becomes weak, you can consider booking profits at Rs 133, which happens to be its five-day short-term moving average.

MOTHERSON SUMI SYSTEMS LTD.

CMP: Rs185.70
BSE Code:517334 

I want to buy the shares of Motherson Sumi Systems as it has fallen a lot. Is this the right time to enter for the long term?
- Ujjval kapoor

AVOID THE STOCK FOR NOW
The stock has corrected due to the demerger of its subsidiary and the same was reflected in its share price. It is one of the leading companies in the auto ancillaries sector. Now, talking about the long-term performance of the stock, it has delivered about 17 per cent returns in the last three years, which is not a good figure. Also, it has underperformed the broader market and most of its peers. The technical indicators, on the weekly timeframe, do not show any bullish sentiment in the stock. Even after the corporate action, the stock hasn’t shown any positive price action that can demonstrate buyers’ interest. Thus, you can consider avoiding the stock for now till it shows any improvement and look for better opportunities elsewhere.