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Voda Idea, Bharti Airtel: Strategies for telecom stocks post AGR verdict

Until the telecom index does not conquer 1,270 mark, the upside potential is going to experience a negative sentiment.
The Supreme Court has allowed telecom companies to pay their adjusted gross revenue dues dues in 10 years. Telcos, according to the Supreme Court verdict, can pay 10 per cent of their dues by March 31, 2021, and the remaning instalments by 7 February every year. READ ABOUT IT HERE

The development triggered a sharp fall in Vodafone Idea, down over 15 per cent, while Bharti Airtel moved up over 6 per cent. Here are the key levels you need to track.

BSE Telecom Index: Until the telecom index does not conquer its first resistance levels of 1,270 levels, the upside is capped. The daily chart shows a “Lower high, lower low” formation, which reflects a sell on rise strategy. The next resistance is 1,310 for the index and looks difficult to cross as things stand. Over the next few sessions, there are chances that the index may drift towards 1,170 levels as the overall sentiment in the telecom sector remains subdued. CLICK HERE FOR THE CHART


Bharti Airtel Ltd (BHARTIARTL): The stock had been hovering around the 200-day moving average (DMA) since the past few sessions at Rs 508, which has become an immediate support level. Till the stock holds the ground above this level, an upside bias may see a reversal towards Rs 560 levels, which is its trendline resistance. The AGR verdict pushed the stock nearly 6 per cent higher to around Rs 546 levels on Tuesday. Relative Strength Index (RSI) is trading sideways with no specific direction as of now. On Tuesday, a swing in RSI move needs a strong close on volumes for this stock to breeze past the Rs 560 mark. CLICK HERE FOR THE CHART


Vodafone Idea Ltd (IDEA): As the counter breaks out of the consolidation phase with a firm jump in volumes, the upside rally is set towards Rs 12 and Rs 13.50 levels. The closing basis support falls at Rs 9 levels. Also, this stock has managed to sustain above the 50-DMA, which indicates the trend will turn highly optimistic. The weekly chart reveals minor selling resistance at Rs 11 levels. CLICK HERE FOR THE CHART


Bharti Infratel Ltd (INFRATEL): This stock is caught between the 200-DMA and 100-DMA levels. The range of Rs 200 to Rs 211 has become the resistance level on the higher side while Rs 198 is acting as the strong support, which seems unlikely to be breached on a closing basis. That said, the counter did slip below this in intra-day trade on Tuesday, down 5.5 per cent to Rs 187 levels post the AGR verdict. The breakout needs to have consistent close for two sessions for the stock to move above the Rs 200 mark.  CLICK HERE FOR THE CHART

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