Technical Analysis

Movers and Shakers: Stocks that will see action this week

Akhil Nallamuthu BL Research Bureau | Updated on October 02, 2021

Sun Pharmaceutical Ind (₹826.6)

Breaks out afresh

The stock of Sun Pharmaceutical Industries, which has been on a steady rise since November last year after taking support at ₹450, entered a consolidation phase in August this year. It was broadly oscillating between ₹755 and ₹800. But last week, the stock broke out with considerable volume, opening the door for further strengthening. The price action since August — a rally, then a sideways trend, followed by a breakout — suggests that the scrip could touch ₹930 over the medium term. So, going ahead, the stock is likely to retest ₹800 level, which is now a support, and then establish another leg of uptrend. Thus, traders can buy the stock at current level and then average at ₹800; stop-loss can be placed at ₹760. While the stock can pause at ₹900, it is likely to reach ₹930, which can be the target.

Gujarat Fluorochemicals (₹1,952.1)

Resumes uptrend post consolidation

The stock of Gujarat Fluorochemicals is on a sharp rally since April this year. Yet, after hitting ₹1,820 in the first week of August, the stock saw price moderation. But since the major uptrend remained intact, it regained traction and crossed over ₹1,820 last week. The price action over the past couple of months resembles an ascending triangle pattern, hinting at further rally. The daily MACD shows a fresh uptick. So, the stock is well-positioned to extend the up-move, and touch ₹2,150, possibly ₹2,240, as indicated by Fibonacci extension. Traders can go long at current levels, accumulate at ₹1,840 with stop-loss at ₹1,720 and look for targets at ₹2,150 and ₹2,240. If the stock moves above ₹2,000 without intermediate correction, shift the stop-loss upwards to ₹1,900.

Power Grid Corporation (₹191.8)

Breaches a key barrier

On the back of the solid base at ₹115, the stock of Power Grid Corporation established an uptrend towards the end of October last year. But after reaching ₹188 in June this year, the stock saw its price drop to ₹168 in the following weeks and until last week, its movement was restricted to the band of ₹168 and ₹188. Last week, the hurdle at ₹188 was breached. This is a bullish sign and in the coming weeks, the stock is expected to make considerable gains. The RSI and the MACD show good bull strength. Initially, the stock could reach ₹208, which is a potential resistance. A breach of this can lift it to ₹220. But there can be a minor decline before rallying. So, buy at ₹191 and at ₹185 with stop-loss at ₹176. Targets can be ₹208 and ₹220.

Amara Raja Batteries (₹766.8)

Potential bullish trend reversal

After declining since the beginning of the year and marking a fresh 52-week low of ₹665 in August, the stock of Amara Raja Batteries seems to be changing direction. The stock broke out of the resistance at ₹743 last week with significant volume and the 21-day moving average (DMA) crossed over the 50-DMA, indicating medium-term bullish reversal. The RSI and MACD substantiate the same. So, going forward, the stock is likely to move up and face its first major resistance at ₹840 — the 50 per cent retracement level of the downtrend. A breakout of this level can lift it to ₹875, a notable resistance. So, traders can buy at current price and average at ₹743; place stop-loss at ₹715. Shift stop-loss to ₹800 if price touches ₹840 and book profits at ₹875.

Dixon Technologies (₹4,844.6)

Cracks an important resistance

The stock of Dixon Technologies, which saw depreciation in July and August, realigned with the major uptrend by rebounding from the support at ₹3,800. The recovery gained strength and the scrip breached the critical resistance band of ₹4,650 and ₹4,700, turning bullish. The breakout volume looks significant. Supporting the positive outlook, the RSI and the MACD have entered the bullish zones. So, one can consider buying at current levels and add more on a decline to ₹4,650. Initial stop-loss can be at ₹4,500. Be prepared for a minor correction or a pause at ₹5,000, which eventually will be breached. If the stock decisively rallies past ₹5,000, revise the stop-loss to ₹4,700. A breakout of ₹5,000 will intensify the rally to ₹5,200 and then to ₹5,330, which can be the targets.

Published on October 02, 2021

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