Technical Analysis

Movers and Shakers: Stocks that will see action this week

| Updated on April 25, 2021

Cadila Healthcare (₹570.9)

Hits new all-time high

The stock of Cadila Healthcare, which had been moving down gradually since the beginning of the year, found support at ₹420 by the end of March. The 200-day moving average coincided at ₹420 then and thus the bulls capitalised on the support to turn the tide in their favour. That is, since taking support at this level, the scrip has been appreciating with considerably good momentum. As a result, the stock rallied past the previous high of ₹509.2 and extended the gain. The price action looks bullish now and it is supported by indicators like the relative strength index and the moving average convergence divergence on the daily chart as they remain in their bullish territories. Also, the rally is accompanied by large volume. Hence, traders can buy the stock with a stop-loss at ₹540 for a target of ₹620.

Petronet LNG (₹235.2)

Bulls are gaining traction

Apart from a rally in the first week of this year, the stock of Petronet LNG has largely remained inclined towards a bearish trend. Especially since the beginning of March, the stock has been witnessing a steady decline from about ₹260. But since the final week of March, for the ensuing three weeks, the stock was trading in a sideways trend i.e., it was oscillating between ₹220 and ₹233. The stock began last with a gap-down such that the open price was below the support of ₹220. However, it recovered in the very next session and started rallying strongly. Consequently, it broke out of the resistance at ₹233. Also, the price is now above the 21-day moving average. So, one can buy with stop-loss at ₹227; target can be ₹248.

Wipro (₹475.7)

Sees a fresh breakout

Following a substantial rally that the stock of Wipro established in June last year from about ₹180, it entered a consolidation phase in mid-January this year after facing a resistance at about ₹465. Since then, the stock was charting a horizontal pattern wherein it was fluctuating between the support at ₹400 and the resistance band of ₹450 and ₹465. But notably, the scrip broke out of the resistance band with huge volume and registered a fresh lifetime high of ₹494.5 on Thursday before closing the week slightly lower at ₹475.7. This is a bullish sign and the chart pattern — a rally followed by consolidation followed by a breakout — corroborates the same. Also, the 21-day moving average has crossed over the 50-day moving average. So, go long with a stop-loss at ₹460 for a target of ₹500.

Avenue Supermarts (₹2,713.7)

Breaches a support

The stock of Avenue Supermarts has had a bumpy ride since the beginning of 2021. That is, it has been facing frequent change in the direction of trend, implying increased volatility. But the price action since the second week of March indicates that the stock has been setting a bearish tone. The price dropped from about ₹3,300, which was arrested by the support at ₹2,790 towards the end of last month. Since then, until last week, the stock was moving in a sideways trend where it was held within the price levels at ₹2,790 and ₹2,980. On Thursday, the stock breached the support at ₹2,790 and closed below it comfortably and therefore, the price action on the daily chart has turned bearish. Hence, traders can go short with stop-loss at ₹2,825 and target at ₹2,560.

Larsen & Toubro (₹1,322.9)

Likely to extend the decline

The stock of Larsen & Toubro began the year on a strong footing as it appreciated and marked a fresh 52-week high of ₹1,593 in early February. However, the uptrend lost momentum and after consolidating briefly it started to depreciate. For the past two months, the scrip has been forming lower highs and lower lows and last week, the stock closed below the support at ₹1,340, increasing the likelihood of further dip in price. Adding to the bearishness, the price lies below the 21-day moving average and indicators like the moving average convergence divergence and relative strength index are in their negative territories. The average directional index shows that the bears have an upper hand over the bulls. Because of these factors, traders can sell the stock with stop-loss at ₹1,375; target can be ₹1,230.

Published on April 24, 2021

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