Technical Analysis

Movers and Shakers: Stocks that will see action this week

Akhil Nallamuthu BL Research Bureau | Updated on July 17, 2021

ACC (₹2,129.3)

Breaks out of a range

The stock of ACC, which ended 2020 with a gain of nearly 12 per cent, has been extending the rally in 2021 as well. It has been gradually appreciating, with minor intermittent corrections. Nevertheless, in June, the stock got into a range of ₹2,000 and ₹2,065 and was moving in a sideways crawl. But last week, it acquired enough buying momentum and broke out of the resistance at ₹2,065, opening the door for further rally. Supporting the bullish bias, the RSI and the MACD on the daily chart are showing fresh uptick. Notably, the stock has bounced off the 50-day moving average, something that has occurred several times this year. Thus, the stock seems to have positioned itself to go up further, so buy with a stop-loss at ₹2,065 for a target of ₹2,250.

HDFC Life (₹698)

Bounces off a support

The stock of HDFC Life Insurance company, which recovered after hitting a low of ₹340 in March 2020, rallied through the rest of the year. However, come 2021, it looks to have lost the momentum. Although there was not considerable price correction, it could not continue its upward journey since January and has been trading between ₹680 and ₹730. Though the stock has not moved out of the range, there are some positive factors for it now. Last week, the price bounced off the ₹675-level, where the 50-day moving average coincides and the RSI and the MACD are beginning to show positive signs. Moreover, risk-reward ratio favours long positions at current levels. Hence, one can consider initiating fresh longs in the scrip with stop-loss at ₹680 for a target of ₹725.

L&T (₹1,618.7)

Hits fresh all-time high

The stock of Larsen and Toubro (L&T) witnessed a strong rally between November last year and the first week of February this year, wherein the price rose from about ₹920 to a high of ₹1,593. But then, the uptrend lost steam and after a brief period of consolidation, the stock began moving downwards. The price declined the following months and towards April end, the stock stopped depreciating on the back of support at ₹1,310. The stock, which recovered, again faced barrier between ₹1,565 and ₹1,600, and softened a bit. But this time, it was quick to recover and last week, it decisively broke out of ₹1,600 with substantial volume, turning the outlook positive. Given these factors, one can be bullish and buy with stop-loss at ₹1,565; target can be at ₹1,715.

HPCL (₹268.1)

On a steady decline

The stock of Hindustan Petroleum Corporation Limited (HPCL), which was gaining at a slow pace since January this year, picked up momentum in May and saw a sharp rally. The price went up from about ₹228 in May to a fresh 52-week high of ₹312 by mid-June, returning nearly 37 per cent within a couple of months. Yet, looking at the daily chart, the stock has largely been moving in a horizontal trend in June before breaking below the key support of ₹290 a couple of weeks back. This turned the outlook weak and since then it has been steadily declining. Corroborating this, the RSI and the MACD entered the bearish zone and the scrip slipped below 50-day moving average. Thus, traders can short the stock with a stop-loss at ₹278 and target at ₹250.

Eicher Motors (₹2,617.2)

Breaks down after consolidation

The stock of Eicher Motors has been witnessing considerable volatility since the start of 2021 and has not been able to establish a trend in either direction. The scrip, which initially rallied to ₹3,000, swiftly reversed and by April dropped to ₹2,300 levels. On the back of support at ₹2,300, the stock attempted to rally but was restricted at ₹2,750. Several efforts to breach this resistance over the past month went in vain and the stock was consolidating between ₹2,650 and ₹2,750. But last week, the scrip clearly invalidated the support at ₹2,650 and dropped below both 21- and 50-day moving average. The break down has opened more space on the downside and so traders can initiate fresh short positions with stop-loss at ₹2,700 and target of ₹2,470.

Published on July 17, 2021

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