Technical Analysis: Rail Vikas Nigam Ltd (RVNL), Union Bank of India, Jain Irrigation Systems

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I had bought Rail Vikas Nigam Ltd (RVNL) shares at ₹405. I don’t mind holding the stock for long term. What is the outlook for this stock? Should I book profits or continue to hold?

Ajay Murali, Kochi

Rail Vikas Nigam Ltd. (₹491.45): The stock has been in a strong up-trend. The share price surged over 17 per cent on Friday. There is room for the stock to rise further from here. But a strong resistance is coming up around ₹530. The chances are high for the current rally to halt around ₹530. A reversal from around ₹530 can trigger a corrective fall to ₹480 or even ₹460. However, the overall trend will continue to remain up. A strong fall below ₹400 will be needed for the outlook to turn bearish.

Since there is limited room on the upside, we suggest caution. Keep a stop-loss at ₹465 and hold the stock. Move the stop-loss higher to ₹490 when the price touches ₹510. You can consider exiting 50 per cent of your holding at ₹525. Then keep the stop-loss at ₹515 for the balance holdings. If the stock turns down from ₹530 and hits your stop-loss, exit your position. On the other hand, if the stock breaks above ₹530 and goes up, then move your stop-loss by ₹10 for every ₹20 rise in price.

I have shares of Union Bank of India. My purchase price is ₹138. Should I continue to hold or sell the stock?

Chandrasekaran M, Erode

Union Bank of India (₹135.75): The multi-year downtrend that was in place from 2010 to 2020 has just got reversed. After some consolidation and a marginal rise, the stock has been in a strong uptrend since July 2022. The share price touched a high of ₹172.45 and has come down from there. This is just a corrective fall within the recent uptrend. There is a strong support around ₹120. A fall beyond ₹120 is unlikely. A sideways consolidation between ₹120 and ₹180 for few months is possible.

Eventually, we can expect Union Bank of India share price to breach ₹180 and rise to ₹225 and even ₹275 in the coming months. Assuming that you are a long-term investor, we suggest you buy more at ₹129. Keep a stop-loss at ₹112. Move the stop-loss up to ₹170 as soon as the stock moves up to ₹195. Move the stop-loss further up to ₹210 when the price touches ₹245. Exit the stock at ₹270.

I own shares of Jain Irrigation Systems. What is the short- and long-term outlook for this stock?

Gurgaon

Jain Irrigation Systems (₹72.57): The stock has been in strong downtrend from August 2010. This downtrend found a bottom around ₹3 in March 2020. Thereafter, Jain Irrigation Systems share price has recovered very well. There is an initial sign of the broader downtrend getting reversed. Resistance is around ₹86. A strong break above it will confirm the trend reversal. That break will open the doors for a rally to ₹145-150 over the long term. Support is in the ₹45-40 region.

There are chances to see a sideways consolidation between ₹40 and ₹86 for a few months before the breakout above ₹86 happens. If you want to play this stock for a long term, then buy on dips at ₹65 and ₹53. Keep the stop loss at ₹38. Trail the stop-loss up to ₹78 when the price goes up to ₹98. Move the stop-loss further up to ₹95 when the price touches ₹115. Exit the stock at ₹145.

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