Technical Analysis

Movers and Shakers: Stocks that will see action this week

Akhil Nallamuthu Bl Research Bureau | Updated on July 11, 2021

Bharti Airtel (₹536.2)

Bulls gaining traction

The stock of Bharti Airtel, which rallied between October last year and February this year, registered a fresh lifetime high of ₹623 in early February. However, the scrip made a U-turn as the price band of ₹610 and ₹630 is a considerable resistance area. The stock declined quickly and fell to ₹510 levels in March, thereby losing about 17 per cent. Following this, the stock started moving in a sideways trend and has largely been oscillating within the price band of ₹520 and ₹550. While the stock gradually declined during the second half of June, it is now showing signs of bulls gaining traction i.e., the stock bounced off the support at ₹520 with good volume. Since the rally is likely to continue, buy the stock with a stop-loss at ₹518 for a target of ₹565.

Muthoot Finance (₹1,534.6)

Breakout sustains

The stock of Muthoot Finance, which rallied since March 2020 lows, entered a consolidation phase in October last year. Since then, it has been consolidating in a broad range of ₹1,100 and ₹1,300 until recently. In early June this year, the scrip broke out of ₹1,300 with substantial volume, turning the outlook positive. But immediately after breakout, it got into a tight range of ₹1,450 and ₹1,520. Nevertheless, it broke out of this range last week and is able to sustain above the resistance-turned-support level of ₹1,520. Notably, the 21-day moving average support is at ₹1,500. Therefore, the outlook is positive for the stock and traders can initiate fresh long positions with stop-loss at ₹1,480. On the upside, the stock has potential to appreciate to ₹1,630 in the short term.

OFSS (₹3,944)

Witnesses fresh breakout

The stock of Oracle Financial Services Software established its latest rally in mid-February this year from about ₹3,000. However, after reaching ₹3,800 in May, it stopped rallying as this has been a strong hurdle. It then began consolidating between ₹3,500 and ₹3,800. But on Friday, the stock broke out of ₹3,800 with significant volume, re-establishing the uptrend. The bullish bias is corroborated by the fresh uptick shown by the relative strength index and moving average convergence divergence indicators on the daily chart. Moreover, the stock has consistently rebounded from the 21-day moving average and last week’s bounce emulates the same. Hence traders can go long on the stock with stop-loss at ₹3,800. Though ₹4,000 is a key resistance, the stock will likely move past and touch ₹4,225.

NMDC (₹167.5)

Breaches a critical base

Even though the stock of NMDC began the year on the back foot, it swiftly reversed the trend upwards. That is, after declining to ₹104 levels by the end of January, the scrip reversed higher and rallied sharply in the subsequent months. As a result, the stock appreciated and hit a fresh 52-week high of ₹213.2 in May. But the bulls lost momentum and then the price started to moderate. Since then, the stock has been trading with a bearish bias. Even as the support at ₹173 remained a good base, the stock was forming lower highs and, last week, sellers gained momentum and pulled the scrip down below the support at ₹173. The price action indicates that further decline is likely, thus, one can sell the stock with stop-loss at ₹173; target at ₹155.

GAIL (₹147.1)

Registering lower lows

The stock of GAIL, which had been appreciating since November last year, started to show signs of weakness since May this year, indicated by a bearish divergence in the relative strength index. On the back of this, despite forming a higher high of ₹170.3 last month, the stock changed direction downwards and has been gradually depreciating. Last week, the decline extended and the stock slipped below the support of ₹150. The downtrend is likely to continue as the stock looks weak, with the relative strength index and the moving average convergence divergence indicators entering their respective bearish zone. Also, the 21-day moving average is on the verge of going below the 50-day moving average. Therefore, traders can short the stock with a stop-loss at ₹152 for a target of ₹140.

Published on July 10, 2021

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