Despite SC verdict on AGR dues, Airtel, Voda Idea look good on charts

While the Street has given a thumbs down to the development, technical charts suggest a completely different picture. MTNL has the best chart formation among the lot.

The Supreme Court on Friday dismissed the applications filed by telecom majors, including Vodafone Idea and Bharti Airtel, raising the issue of alleged errors in calculation in the figure of Adjusted Gross Revenue (AGR) related dues payable by them.

Post the development, the impacted stocks - Bharti Airtel and Vodafone Idea - traded weak with the latter slipping as much as 15 per cent in intra-day deals. READ ABOUT IT HERE

Is it time to stay away from the telecom sector given the development, or can the hike in tariffs by the telecom service providers prove as a catalyst for an upside?

Here's how these stocks look on the technical parameters.

BSE Telecom Index
Likely target: 1,500 and 1,550
Upside potential: 5% and 8%

The index can rally firmly towards 1,500 levels, if it manages to breakout on the “Ascending Triangle” formation, as per the daily chart. An aggressive rally conquering the horizontal trendline placed at 1,430 levels may spark a bullish price action in the medium-term. As long as the lower support of 1,360 is held on the closing basis, the positive bias is expected to hint a long sentiment. CLICK HERE FOR THE CHART
 
Vodafone Idea Ltd (IDEA)
Outlook: Needs follow-up buying to regain lost momentum

As long as the support of 100-weekly moving average (WMA) placed near Rs 7.50 is held on a closing basis, the stock can rebound from Friday's low. Although, it did manage to conquer 200-days moving average (DMA) recently, but the follow-up buying failed to sustain the positive breakout, as per the daily chart. The SC verdict on AGR dues recalculation on Friday dealt a big blow to the chart pattern, but it can scale higher levels going ahead provided there is follow-up buying. The key resistance is Rs 11. A breach can take it higher towards Rs14 and Rs 16 levels. CLICK HERE FOR THE CHART
 
Bharti Airtel Ltd (BHARTIARTL)
Likely target: Rs 580 and 595
Upside potential: 7% and 10%

Unless a complete breakdown emerges below the support of 200-DMA, the upward bias seems here to stay despite the blip seen on Friday post the SC verdict on AGR dues recalculation. The 200-DMA is currently placed at Rs 521 levels and continues to provide relevant support for the stock. The Relative Strength Index (RSI) is holding the support of 40 value, and until it trades above the same, the underlying strength will remain and can propel Bharti Airtel towards Rs 580 and Rs 595 levels in the medium-term, which is the next crucial resistance. At the fundamental level, the recent hike in tariff should augur well for the stock and provide some cushion.  CLICK HERE FOR THE CHART

Mahanagar Telephone Nigam Ltd (MTNL)
Likely target: Rs 28 and Rs 30
Upside potential: 16% and 25%

 A “Golden Cross” may result in a sharp upside above the resistance of Rs 24 levels in this counter. MTNL has the best chart formation among the telecom counters. The 200-DMA converge with 50-DMA at Rs 14 levels, which becomes the medium-term support for the stock. The immediate closing basis support comes at Rs 20 levels. A breakout above Rs 24 may see MTNL rally towards Rs 28 and then Rs 30 levels, as per the weekly chart. CLICK HERE FOR THE CHART
 
Indus Towers Ltd (INDUSTOWER)
Outlook: needs to cross 200-DMA

The counter needs to aggressively close above the 200-DMA placed at Rs 236 levels. When that happens, it may see an upside towards the next resistance of Rs 267, which is its 200-WMA. Though the current chart pattern suggests that the stock is on a weak wicket, this may change once it manages to cross 200-DMA. The next support comes at Rs 210 and Rs 202 levels. CLICK HERE FOR THE CHART