Technical analysis: Asian Paints, Aarti Industries, Jai Corp and Electrosteel Castings

I have shares of Asian Paints bought at ₹3,075. Should I continue to hold the stock or exit?

P Narayanan Nair

Asian Paints (₹2,260): After oscillating in a wide sideways range for more than three years, Asian Paints share price has tumbled since October last year. The crucial support level of ₹2,700 has been broken. There is support near current levels at ₹2,200. But a bounce from here can be capped at ₹2,700. The stock has room to see ₹2,000 on the downside.

This fall can happen either from here itself or after a short-lived corrective bounce to ₹2,700. The stock has to rise past ₹2,700 to become bullish again. That might not be very easy. So, it is better to exit the stock now and accept the loss. Always remember to have a proper stop-loss and exit level at the time of entering a stock. This will aid in exiting a wrong position with a minimum loss.

I have shares of Aarti Industries. My average purchase price is ₹600. I am a long-term investor. What is the outlook?

K. Sivanandam, Puducherry

Aarti Industries (₹442): The stock has been in a strong downtrend since 2022. There is no sign of a reversal. On the charts, the picture is still weak. The long-term uptrend that was in place since 2014 has been broken. Resistances are at ₹470 and ₹540. Some support is at ₹400 which is holding for now. But any bounce from here will be capped and short-lived.

A strong break below ₹400 will increase the danger of the share price tumbling towards ₹300 and ₹250. Aarti Industries share price has to rise above ₹700 in order to indicate a trend reversal. It is better to exit the stock now and accept the loss rather than waiting with a hope for a reversal.

I am holding shares of Jai Corp. Can I buy more now? What is the outlook?

Chandan Bhurat

Jai Corp (₹148): The share price has tumbled over 50 per cent in just the last three weeks. The sharp fall was triggered after the news on capital reduction proposal by Urban Infrastructure Holdings Private Limited (UIHPL), where Jai Corp holds 32 per cent stake. The impact of this news is still on the stock. So, there is a danger of seeing more fall to ₹100 and even lower if the share price declines below ₹130.

Also, even if a recovery happens, it may take a long time to go back above the levels of ₹250 and ₹300 again. Considering the uncertainty prevailing over stock based on the news, it is better to stay out it now. You have not mentioned your purchase price. But whatever be the entry point, exit the stock now.

What is the long-term outlook for the stock of Electrosteel Castings? Is it a good time to buy this stock now?

Nisha, Lucknow

Electrosteel Castings (₹127): The stock peaked at ₹236.65 in September last year and has come down sharply from there. The downtrend is strong. Resistance is in the ₹135-₹140 region. As long as the stock stays below ₹140, the downtrend will remain intact. The share price can fall to ₹100 from here.

Thereafter the price action will need a watch to see if a reversal is happening or not. To become convincingly bullish again, the stock has to rise past ₹140. Stay out of the stock now. If you are a high-risk appetite player, then you can buy the stock around ₹100 with a tight stop-loss at ₹95. You may have to exit if the bounce from around ₹100 fails to breach ₹140.

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