Is It a Good Time to Invest in Sterlite Technologies?

Investing in the stock market involves analyzing various factors to determine whether a particular stock is a good fit for an investor's portfolio. In this article, we will examine Sterlite Technologies from a technical perspective, considering the current market price and providing insights for both short-term and long-term investors. The information provided is based on the data last refreshed on June 5, 2020, with the stock price at Rs. 109.95.

10-Year Chart Analysis

Looking at the 10-year chart, we can observe a predominantly bearish trend. The stock price has broken below the long-term trendline, which is a strong bearish signal. If the price falls below Rs.62, it is possible to see further declines, with potential support levels at Rs.46 and Rs.30. However, these bearish predictions are negated if the stock price manages to break above Rs.139.25.

Medium-Term Perspective

On a medium-term scale, the stock exhibits a bullish trend. Over the past three years, the stock has shown buying momentum. Prices could rise to Rs.130 or Rs.187 if they break above Rs.113. Conversely, if the stock closes below Rs.83, this bullish outlook would be invalidated.

Short-Term View

Looking at the daily chart, which covers more than a year of price movement, we can see a bullish trend. For short-term traders, if the stock price breaks above Rs.113, upward targets of Rs.123, Rs.134, and Rs.167 can be expected. However, a close below Rs.88 would signal a reversal of this bullish trend.

Current Daily Chart Analysis

The current daily chart of Sterlite Technologies shows the stock still in a downtrend, well below the 200-day and 50-day moving averages. The Relative Strength Index (RSI) is below 50 and has broken the downward trendline. For short-term traders looking to enter the market, it would be wise to wait for a breakout from the current trendline.

Conclusion

Sterlite Technologies is currently in a consolidation phase with a noticeable downward bias. As of the reference date, it hit the moving average and struggled to find traction, still remaining in a 'Death Cross' zone. For short-term traders, it is suggested to be patient and wait for a breakout before entering the trade. Moreover, the current closing price (CMP) is at Rs.132. For a potential buy, the stock should be above Rs.158 to confirm the reversal.

Key Takeaways:

Long-term trendline break confirms bearish outlook. Bullish medium-term view with potential upside if above Rs.113. Short-term bullishness with higher probability of Rs.134 if above Rs.113. Above Rs.158 needed to confirm short-term bullish trend.

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