Technical Analysis

Movers and Shakers: Stocks that will see action this week

Akhil Nallamuthu BL Research Bureau | Updated on July 31, 2021

JSW Steel (₹737)

Bulls regain traction

Although the stock was moving with a positive bias since January 2021, it had been posting only marginal gains until the end of March. However, in early April, the stock breached the resistance at ₹430 and started to accelerate upwards. The scrip quickly gained and in May it registered a fresh lifetime high of ₹773. But then it lost momentum and moderated to ₹670 levels. That acted as a support, arresting the decline. Nevertheless, it was then moving in a sluggish fashion. Last week, though, the stock started gaining momentum and closed above the key hurdle at ₹730, turning the outlook positive. Also, on Thursday, it made a high in more than two weeks of ₹758.1. Thus, the stock looks bullish and traders can buy it with stop-loss at ₹710 for a target of ₹795.

L&T Infotech (₹4,684.3)

Closes above a critical level

The stock of L&T Infotech, which was steadily rallying since March 2020 lows, seemed to have lost momentum as the calendar turned 2021. While it did not face any significant correction, the stock failed to extend the rally and since the beginning of the year, it has been fluctuating in a broad range of ₹3,580 and ₹4,460. The ₹3,580 level provided critical support and stopped the correction phase from turning into a bear trend. Against this support, the scrip recovered for the second time in mid-May. When it reached ₹4,460 level, it again struggled to move past it. However, the bulls gathered enough momentum to lift it above ₹4,460. As of now, this resistance stands breached and the stock is likely to gain. Hence, buy it with stop-loss at ₹4,460; target of ₹5,000.

Avenue Supermarts (₹3,500.8)

Sees fresh breakout

The stock of Avenue Supermarts has been volatile since the beginning of this year, and it saw quite a few price swings on either side. However, it did not take any particular direction as ₹2,700 acted as a strong base and the price band of ₹3,200 and ₹3,300 limited the upside. The rally, which began in April, appeared steady. However, after moving above ₹3,200 the stock lost steam. But, instead of declining, it held on to the gains even though it was moving across a horizontal price pattern i.e., between ₹3,260 and ₹3,400. Last week, the buyers came in strongly and as a result, the stock broke out of the hurdle at ₹3,400 and hit a fresh lifetime high of ₹3,533.4 on Tuesday. So, traders can go long with a stop-loss at ₹3,400 for a target of ₹3,675.

Kotak Mahindra Bank (₹1,654.8)

Slips below a key base

The stock of Kotak Mahindra Bank rallied from about ₹1,250 in September 2020 to hit ₹2,000 levels by December end. But ₹2,000 acted as a strong barrier and, reacting to it, the stock declined swiftly. By end of January this year, the scrip had fallen to ₹1,700. Although it resumed the rally and appreciated back to ₹2,000 levels, the bears did not let it go above and dragged it down again. The price action since mid-April shows that the stock was in a sideways crawl between ₹1,700 and ₹1,830. The band of ₹1,680 and ₹1,700 provided good cushion. However, last week, the stock slipped below the support band and closed at ₹1,654.8, opening the door for further drop. Given this, one can sell the scrip with stop-loss at ₹1,700; target at ₹1,550.

Cadila Healthcare (₹586.1)

Breaks below a support

The stock of Cadila Healthcare was on a steady downtrend during the early months of 2021. That is, the stock declined after reaching ₹500 in January to ₹415 by the end of March, thereby losing about 17 per cent within three months. However, it picked up momentum and rallied to touch a fresh all-time high of ₹673.7 in May. But then, the stock lost direction and started to take a sideways path. Hence, since mid-May until last week, the stock was largely oscillating in the range of ₹600 and ₹670. It broke below that level on Tuesday and continued to decline for the rest of the week. The 21-day moving average is on the verge of slipping below the 50-day average, a considerable bearish signal. So, traders can short with a stop-loss at ₹605 for a target of ₹550.

Published on July 31, 2021

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