Adani eyes 5G pie: Airtel, Voda Idea need to hold these levels going ahead

Bharti Airtel and Vodafone Idea can slip into a bear trap if these key supports levels are breached; MTNL by far seems a safer bet.

Shares of Bharti Airtel cracked over 4 per cent in trades on Monday, while those of Mahanagar Telephone Nigam (MTNL) and Vodafone Idea soared 15 per cent and 5 per cent, respectively.

The stocks were seen reacting to the news of Adani Group's likely foray into the telecom sector. 

The Adani group has shown interest in the government’s upcoming telecom 5G spectrum auction. The group, however, clarified that the company does not intend to enter the consumer mobility space. 

The decision by Gautam Adani to participate in the spectrum auction to create the group's own private networks to support its businesses has provoked a reaction from telcos who say it will eventually throw him in a headlong competition with them as they believe that 40 per cent of their 5G business revenues will come from enterprises. READ MORE
 

Amid this development, here’s a technical outlook of current telecom players:- 

BSE Telecom Index

Outlook: Breakout only above 50-WMA

The index manages to hold the support of 1,520 - 1,500 levels. On the upper side, the index needs to cross 1,620-mark, its 50-day moving average (DMA), to embark a bullish undertone. As and when this happens, the index could extend its upward breakout to 1,690 level, which is the next imminent hurdle, shows the daily chart. CLICK HERE FOR THE CHART

Bharti Airtel Ltd (BHARTIARTL)

Outlook: Gap-down needs to hold Rs 650 support

There was an “Inverse Head and Shoulder” formation on the daily chart and the momentum showed the breakout was on the way, until the gap-down scenario appeared on Monday. So far, Rs 650 could provide some relief to the decline. However, if the stock fails to hold this support, outlook might turn worse from a short-to-medium term objective.  CLICK HERE FOR THE CHART

Vodafone Idea Ltd (IDEA)

Outlook: Death cross, breach below Rs 8 would mean more downside.

Shares of Vodafone Idea trade under the 200-DMA, a significant indicator to understand the broader outlook. The inability to rise above the same average proves the presence of a bearish bias at the counter. The 200-DMA is placed at Rs 10.75 and breach of Rs 8, its support, would mean the next breakdown to Rs 6 and Rs 5. There is a formation of “Death Cross” of both 50-DMA and 100-DMA with 200-DMA. CLICK HERE FOR THE CHART

Mahanagar Telephone Nigam Ltd (MTNL)

Outlook: Breakout above 50-WMA

The MTNL stock firmly holds the support of Rs 18.50 level, which is its 100-weely moving average (WMA). And if manages to conquer the hurdle of 50-WMA located at Rs 22.80 decisively, the breakout could see fresh momentum towards Rs 30 mark, hints the weekly chart. Only an aggressive close beneath 100-WMA could force the stock into a bear trap. CLICK HERE FOR THE CHART