Technical Analysis

Movers and Shakers: Stocks that will see action this week

Akhil Nallamuthu BL Research Bureau | Updated on September 25, 2021

Indian Hotels (₹178.8)

Breaches multi-year resistance

Ever since marking a low of ₹62.1 in May 2020, the stock of Indian Hotels Company Limited has been in a strong uptrend. Although there was a correction in March and April this year, the stock kept up the bullish momentum and resumed moving upwards. The rally continued and without any hesitation it broke out of the critical resistance of ₹163 with enormous volume. This is important because the stock had failed to surpass this barrier even after several attempts between 2018 and 2020. Now, this is expected to set the tone for another leg of a rally from the current level. So, traders can consider fresh longs now and also on dips with stop-loss at ₹163. The stock can be expected to touch the ₹200-mark and extend the rise to ₹215 within two to three months where profits can be booked. En route, it can face a minor hurdle at ₹190.

Brigade Enterprises (₹419.1)

Sees a fresh breakout

In the first half of 2021, the stock of Brigade Enterprises was oscillating in the wide range of ₹230 and ₹300. This range was broken on the upside in July. The stock then rallied and moved above ₹360 and last week, courtesy of the 21-day moving average support, it rebounded and moved past the resistance of ₹400 with significant volume. There seems to be a good build-up of upward momentum and the bias can remain bullish until price is above ₹400. The stock is likely to move up from here and reach ₹470 in a couple of months. So, buy now and accumulate on dips at ₹385 with a stop-loss at ₹355 for a target of ₹470. Past price action shows that the scrip has a tendency to stay in a range for some period even though the overall direction of the move is upwards, which traders should be prepared for.

Alkem Laboratories (₹4,003.1)

Signs of upswing seen

The stock of Alkem Laboratories was on a decline in the first couple of months this year. However, it found support at ₹2,540 in March. On the back of this, the stock reversed the trend and since then it has been gaining steadily. It broke above the key level of ₹3,100 in June and last week, it rose above a resistance at ₹3,930 and closed marginally above ₹4,000. Although this cannot be counted as a clear breach of ₹4,000, the major trend is up and the momentum is favourable to the bulls. The stock bounced off the 21-day moving average recently, hinting that a considerable upswing in price is just on the way. So, one can consider initiating buys with stop-loss at ₹3,820 for a potential target of ₹4,360. Note that there can be a temporary pause at ₹4,200 area.

United Spirits (₹827.7)

Breaks out of multi-year hurdle

The stock of United Spirits began the year on the back foot as it saw a considerable decline in price after reaching ₹660 levels in January. As a result, the stock had fallen to ₹510, a strong support. At this level, the decline was arrested, and the scrip established an uptrend. The rally continued wherein the stock appreciated and reached ₹770 a couple of weeks ago. The price range of ₹770 and ₹800 is a notable resistance band which had prevented the stock from moving beyond this range since 2015. However, last week, it gathered enough strength and closed above these levels. Going ahead, the stock can extend the rally to ₹950 and then possibly to ₹1,000. So, one can initiate fresh longs now and accumulate on dips at ₹780 with these levels as targets. Place stop-loss at ₹760.

Gujarat Gas (₹621.2)

No challenge for bears

Everything was good for the stock of Gujarat Gas until the first week of August. The stock was gaining since the beginning of the year and hit a fresh lifetime high of ₹786 last month and consistently forming higher highs and higher lows. However, post marking all-time high, the scrip was unable to retain the momentum. As a result the stock started to reverse lower and now it looks to be in a short-term downtrend. Last week, it slipped below the support of ₹650 and a rising trend line, affirming the bearishness. From here it is likely to drop to the next key base at ₹565, where the 50 per cent Fibonacci retracement of the prior downtrend coincides. Subsequent support is at ₹510. Hence, traders can short the stock with stop-loss at ₹670 and look for targets at ₹565 and ₹510.

Published on September 25, 2021

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