Technical Analysis

Movers and Shakers: Stocks that will see action this week

Akhil Nallamuthu BL Research Bureau | Updated on July 03, 2021

Divi’s Laboratories (₹4,519.6)

Continues to make higher highs

The stock of Divi’s Laboratories had a weak beginning to the year 2021 as the price dropped from about ₹3,900 level to ₹3,300 in January. While it recovered from that level quickly, it failed to move past the resistance at ₹3,900 and declined again. Until April, the was trading with a bearish bias. The bulls gained considerable strength, resulting in the stock breaching the resistance at ₹3,900 and moving past the important level of ₹4,000 by mid-May. Since then, the stock has been making higher highs and higher lows. On these lines, the stock bounced off the 21-day moving average last week and rallied past the prior high of ₹4,425. The price action shows that the stock is set to move up further. So, traders can buy with stop-loss at ₹4,380 for a target of ₹4,750.

Dabur India (₹590.4)

Sees high volume breakout

The stock of Dabur India has been witnessing considerable amount of volatility since the beginning of 2021. While it declined initially from about ₹550 to ₹500, the scrip took support at ₹500 and rallied. Although it managed to cross over the hurdle of ₹550, the bulls could not push it beyond ₹580, from where the price fell in April. The stock again attempted to get past this level before a couple of weeks but failed and the price moderated gradually to ₹560, where the 21-day moving average lies. Taking this support the stock succeeded in breaking out of ₹580 last week following which it hit a fresh lifetime of ₹592 on Friday. Now, the stock seems to have more room on the upside and hence, go long with stop-loss at ₹575. Target can be ₹615.

Dr. Reddy’s Laboratories (₹5,575.7)

Cracks a key resistance

Failing to breach the resistance band of ₹5,440 and ₹5,500, the stock of Dr. Reddy’s Laboratories saw substantial decline in the first few months of 2021. It lost about 24 per cent in less than three months from the high of ₹5,443 it made in January this year. Notably, the stock declined from the same level of about ₹5,500 in September last year, showing that it is a strong barrier. The stock started to recover from ₹4,135 towards the end of March and then rallied in the subsequent months. However, after moving above ₹5,400 in mid-May, the up-move lost momentum and then the stock started to consolidate, largely between ₹5,200 and ₹5,400. But last week, it broke out of ₹5,500 decisively, opening the door for further rally. So, buy with stop-loss at ₹5,400 for a target of ₹5,875.

BPCL (₹462.7)

Falling from a strong hurdle

The stock of Bharat Petroleum Corporation Limited (BPCL) looked positive in the first couple of months of this year wherein it rallied from ₹380 to reach ₹480 by the end of February. This level being a strong resistance, the price started to decline, and it touched ₹400 in April. Nevertheless, the stock started to appreciate from ₹400 levels and returned back to ₹480 levels in June. Even though it moved above ₹480 briefly, it could not go above ₹500, thus showing that the price band of ₹480 and ₹500 is a strong barrier. On the back of this, the price has been falling for nearly a month and last week it made a lower low. The outlook is negative and so, short the stock with stop-loss at ₹475; target can be at ₹442.

PFC (₹121)

Slips below a support

The stock of Power Finance Corporation (PFC) marked a fresh 52-week high of ₹140.5 in mid-March. However, the scrip overturned the trend and started depreciating. The fall was considerable wherein the stock lost nearly 26 per cent within a month as it made a low of ₹104.1 in April. Since the 200-day average coincided at that level, the bulls took back control and lifted the price. While the stock rallied since the final week of May, it could not appreciate above ₹133. Since reaching this level a couple of weeks back, the stock has been on a decline and last week, it broke below the support at ₹123. Also, the stock saw a strong sell-off last week and is likely to extend the fall. Hence, sell the stock with stop-loss at ₹126 for a target of ₹110.

Published on July 03, 2021

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