How to trade telecom stocks amid spectrum auction? Check key levels

Technical charts suggest a divergent trend for the three key telecom stocks - Reliance Industries, Bharti Airtel and Vodafone Idea.

On Day 1 of the 5G spectrum auction Tuesday, telecom operators placed bids for spectrum worth Rs 11,000 crore, said sources at the Department of Communication (DoT) said.

The three private sector telecom operators - Reliance Jio, Bharti Airtel, and Vodafone Idea - have collectively put up Rs 4,350 crore as EMD for the bidding, the pre-qualified bidder details released by DoT has shown. This is five times smaller than the last 5G spectrum auctions in 2022, data shows. READ MORE

Amid the ongoing spectrum auction, here's how the key telecom stocks are placed on the charts:

Reliance Industries (Parent company of Reliance Jio)

Last close: Rs 2,908

Bias: Range-bound

Support: Rs 2,800; Rs 2,780

Resistance: Rs 3,000; Rs 3,025

Reliance Industries stock has been underperforming the market since the last five months. Since February, the stock has gained a mere 2 per cent as against a 9.2 per cent rally on the NSE Nifty 50 index. Reliance stock has broadly traded in a band of Rs 2,800 - Rs 3,000 during this period. CLICK HERE FOR THE CHART

Key momentum oscillators indicate an indecisive trend at the counter, with DI (Directional Index) lacking strength. For now, the stock is likely to remain range-bound, with downside extension possible to Rs 2,780 and upside extension to Rs 3,025 levels. Breakout and sustained trade beyond these levels shall determine the future trend for Reliance stock.

Bharti Airtel

Last close: Rs 1,415

Bais: Positive

Support: Rs 1,390; Rs 1,345

Resistance: Rs 1,450; Rs 1,500

Bharti Airtel stock has surged over 78 per cent, post the breakout on the weekly chart in mid-May 2023. The stock is seen treading along the higher-end of the Bollinger Bands on the weekly scale. The chart suggests likely upside of Rs 1,500 levels. Support for the stock is seen at Rs 1,390. CLICK HERE FOR THE CHART

On the daily scale, the stock is seen testing resistance around its super trend line resistance at Rs 1,450 levels. On the flip side, break and sustained trade below Rs 1,390 can trigger a decline to Rs 1,345 levels.

Vodafone Idea

Last close: Rs 17.19

Bais: Positive

Support: Rs 16.60; Rs 15.50

Resistance: Rs 17.75; Rs 18.40

The price-to-moving averages action on the Vodafone Idea stocks seems favourable, as the stock trades firmly above its key moving averages on the daily scale. Key momentum oscillators on the daily and weekly scale too are placed favourably.

However, on the upside, the stock faces multiple resistances around Rs 18.40 levels. The stock will need to clear this double-top hurdle for further gains to emerge. Till such time, Rs 17.75 - Rs 18.40 range may act as the key hurdle area. On the downside, support for the stock can expected around Rs 16.60 and Rs 15.50 levels. CLICK HERE FOR THE CHART