Pending AGR verdict has been an overhang on telecom stocks.Should you exit?

The BSE Telecom index appears to be in a consolidation mode between 1,370 and 1,235 levels

Telecom sector stocks have been trading range-bound given the overhang of the adjusted gross revenue (AGR) dues. The Supreme Court Friday sought the details of spectrum sharing pact between Reliance Communications (RCom) and Reliance Jio and said as to why the company using the spectrum of the other firm cannot be asked to pay AGR related dues to the government. Spectrum is a government property, not private, and anyone using it is liable to pay the dues, the apex court said. READ MORE HERE

That apart, Bharti Airtel witnessed wild swings last week as confusion reigned over its weighting in the widely tracked MSCI India index. Initially, the stock fell more than 4 per cent after a sales note floated by brokerages showed that the global index provider had halved Airtel’s weighting on the MSCI India index from 3.68 per cent to 1.92 per cent during its August review. READ ABOUT IT HERE

Given these developments, should you exit telecom sectpr stocks and look for investment-worthy opportunities elsewhere? Here's what charts say.

BSE Telecom Index: The index appears to be in a consolidation mode between 1,370 and 1,235 levels.  The current momentum shows that the index will face resistance at its 50-day moving average (DMA) placed at 1,298. From an immediate viewpoint, the index needs to give a strong close above 50-DMA. Though the overall trend looks stable, a breakout from this consolidation phase will define the next course.  CLICK HERE FOR THE CHART

Bharti Airtel Ltd (BHARTIARTL):  The AGR overhang and the MSCI move has impacted the sentiment and the stock has been in a consolidation phase. A range of Rs Rs 600 to Rs 530 remains key. Any decent move on either side will decide the next moves for Bharti Airtel. As of now, the price is hovering around the lower side of the consolidation range. Going forward, if the counter sees consecutive closes below Rs 530, it can drop further towards Rs 500 levels, which is its 200-DMA. CLICK HERE FOR THE CHART

Vodafone Idea Ltd (IDEA): This counter showed stability above Rs 7 levels despite the overhang of the AGR verdict. Going forward, Vodafone Idea needs to decisively conquer Rs 9.50 on a closing basis to witness further upside towards Rs 12 and then Rs 14 levels. The RSI and MACD have seen a positive crossover. Over the past few weeks, the volumes have remained subdued in the absence of a clear verdict by the Supreme Court (SC) as regards AGR dues and this needs to be considered while taking position in this counter. CLICK HERE FOR THE CHART

Bharti Infratel Ltd (INFRATEL): A “double top” formation has hampered the positive sentiment, the daily charts indicate. This counter is gradually losing the upward strength as price has failed to cross Rs 202 – Rs 207 levels. If breaks the support of Rs 185 on the downside, then may see a further sell-off towards Rs 170 levels. CLICK HERE FOR THE CHART