I have Aurobindo Pharma shares. What is the medium to long term outlook for this stock?
Aurobindo Pharma (₹524.10): The stock has been in a strong downtrend since June 2021. There is no sign of a reversal and also of bottom formation. Thus, the general downward trend is still intact. There is room for Aurobindo Pharma stock to fall further from current levels. The next major and strong support is only available at ₹385 – the 200-month moving average (MA). The current Aurobindo Pharma downtrend may extend to ₹385. However, in March 2020, this 200-month MA provided strong support and the stock rose nicely from there. So, there is a good chance that the stock could bottom around ₹385 in the next few months.
Since you haven’t mentioned your purchase price, it’s very difficult to give advice. However, if you are losing, it is best to get out of this stock at current levels. Perhaps you could consider buying back the stock at ₹390. From a long-term perspective, a strong rebound and possible trend reversal from the 200-month MA will have the potential to lift Aurobindo Pharma back to ₹800-900 levels over the next few years.
I bought Can Fin Homes at an average price of ₹525. What is the long term outlook? Should I exit the stock with a loss or accumulate at current levels? I am a long term investor.
Can Fin Homes (₹519.85): Since you are a long-term investor, you can continue to own the stock. From a long-term perspective, Can Fin Homes has the potential to target ₹730 and ₹780 in the coming months. But it is unclear whether the rally to the above mentioned levels will happen from here on its own or after seeing further falls. Immediate support is at ₹460. Below, ₹430 and ₹400 are strong supports.
Much lower support is at ₹360. Even if a drop is seen from here, the downside is likely to be limited to ₹400. You can consider hoarding the stock at ₹470 and ₹440. Keep the stop-loss at ₹340. Follow the stop-loss up to ₹565 as soon as the stock rises to ₹640. Move the stop-loss up to ₹660 when the stock touches ₹710 on the upside. Exit from stock at ₹770.
I hold shares of Polyplex Corporation at an average price of ₹2,150. The share price has been steadily declining. Please advise if I can continue to hold the stock or exit it.
Ramakanth Bhat, Kochi
Polyplex Company (₹1,712.05): The stock has been consistently beaten over the past four weeks. There is no sign of a reversal at this time. The next supports are at ₹1,620 and ₹1,560. It will be necessary to see if the title manages to rebound on one or the other of these two supports. If the stock continues to fall below ₹1,560, then it may drop towards ₹1,250. If a strong rebound is seen from ₹1,620 or ₹1,560, a relief rally to ₹2,000-2,100 is a possibility. But it will still be a corrective rally and not a trend reversal.
To indicate a strong trend reversal, Polyplex Corporation must decisively break above ₹2,100. It may not happen immediately. You can consider two options. The first is to exit the stock with a loss at current levels. The second option will be if you still have an uninvested allocation, you can accumulate to ₹1,630. Keep the stop-loss at ₹1,590. Exit the stock when it rises to ₹2,000. Ideally, our suggestion for you will be to exit the stock at current levels with a loss. You can consider reinvesting this money in other good stocks that will have the potential to rally in the coming months.