Is it Good if I Hold TNPL Shares for the Long Term?

The decision to hold TNPL (Tech Mahindra) shares for the long term can be complex, especially when dealing with volatile markets. This piece explores the potential benefits and risks associated with holding TNPL shares in the long term, based on both fundamental and technical analysis. We will also discuss alternative investment options and provide key insights for traders and investors.

Fundamental Analysis of TNPL

As an Adisory, rather than an officially registered financial advisor, I share my experiences and insights. Here are the steps to consider when evaluating TNPL for long-term investment:

1. TNPL's Non-Profit Status and Market Monopoly:
While TNPL is currently not making profits, it holds a monopoly in certain sectors, such as digital payments with its subsidiary Paytm. However, Paytm is a separate entity and not directly TNPL. TNPL's performance as a company can still be significant given its involvement in various sectors like technology, digital services, and consulting.

2. Market Stability and Consistency:
Investors should consider the company's historical performance and its ability to weather economic uncertainties. While TNPL may not be profitable currently, it has demonstrated resilience in the long term, making it a potential candidate for a long-term investment.

Technical Analysis and Market Sentiment

Technical analysis involves studying past market data to make predictions about future price movements. Here’s a detailed analysis based on the weekly and daily charts:

Weekly Chart Analysis:

Recent candlesticks show a bearish engulfing pattern, indicating a possible end of an uptrend. The last candlestick formed a bearish belt hold pattern, suggesting strong bearish sentiments. A bearish crossover of the 10 and 20 EMA lines further supports the bearish trend. The MACD and Stochastic indicators are both in downward trends with a bearish crossover, reinforcing the bearish interpretation.

However, these bearish indicators are not conclusive, and we need to look further:

Trend Support Zone and Reversal Patterns:

The weekly chart also highlights a support zone around 331, where the trend has reversed multiple times in the past. This area has shown to be a crucial level for the stock, suggesting that the current bearish trend might reverse:

Morning Star Pattern Opportunity:

The daily chart shows a spinning top candle just above the support zone, indicating potential support at this level. Should the next day's candle open with a gap up, it could form a morning star pattern, a bullish reversal signal. This bullish pattern could lead the trend to potentially reach and test moving averages, creating an escape door near these averages for potential profit taking.

Alternative Investment Options

Considering the current market conditions, if you don't want to hold TNPL, here are some alternative investment options that could be explored:

Paytm (BEST HOPE FOR LONG-TERM INVESTORS):Given Paytm's monopoly in digital payments, it might be a better long-term investment, as the intrinsic value of Paytm within TNPL could grow over time. Other Tech Companies:Consider other tech companies with strong fundamentals, sustainable growth, and proven resilience in the market. Sector Diversification:Explore and invest in diversified portfolios that include companies from various sectors, including technology, finance, and consulting.

Conclusion

In conclusion, while the current market sentiment may favor bearish movements for TNPL, the support zone around 331 and potential reversal patterns present opportunities for long-term investors. However, it is crucial to conduct thorough research, consult with financial advisors, and base investment decisions on a combination of fundamental and technical analysis. Consider alternative options like Paytm or other tech companies to ensure a balanced and robust investment portfolio.