Technical Analysis

Movers and Shakers: Stocks that will see action this week

Akhil Nallamuthu | | Updated on: Oct 30, 2021

ABB India (₹2,119.9)

Registers new lifetime high

The stock of ABB India, which has been in an uptrend since November last year, slowed after reaching ₹1,800 in June. But last week, the stock breached this level decisively and marked a fresh lifetime high of ₹2,153.75. The price action hints at further rally. From the current level, the scrip has the potential to advance to ₹2,300 in the near term. Yet, there is a chance for a minor correction. So, traders can go long at current level and accumulate when the price softens to ₹1,930. Place initial stop-loss at ₹1,880 and shift it to ₹2,120 if the stock goes above ₹2,200. Liquidate the longs when the stock hits ₹2,300. If the stock rallies above ₹2,200 without seeing a corrective dip to ₹1,930, stop-loss can be maintained at ₹2,120 for the target of ₹2,300.

Deepak Nitrite (₹2,230.3)

Weak short-term outlook

The stock of Deepak Nitrite was in a strong uptrend ever since recovering from the March 2020 lows. However, after touching ₹3,000 levels earlier this month, the stock lost momentum and saw a price decline. Last week, the stock breached the support at ₹2,350, turning the near-term outlook negative. Substantiating the same, the stock slipped below a rising trend and both the 21- and 50-day moving averages. So, one can short the stock at current level and short again if it rallies to ₹2,350. Keep an initial stop-loss at ₹2,450. On the downside, the stock is likely to fall to ₹1,970, which can be the target. The decline can take a pause at ₹2,000 levels. If the stock depreciates below ₹2,060 without re-testing the price level of ₹2,350, the stop-loss can be maintained at ₹2,200.

Alkem Laboratories (₹3,610.6)

Invalidates a support band

The latest leg of rally in the stock of Alkem Laboratories began from about ₹2,600 in March this year and it lifted the stock to a new high of ₹4,070 in September. Since then, it has been on a decline and as a continuation of the down-move, the stock invalidated the support band of ₹3,710 and ₹3,750 last week. Thus, the short-term trend has turned bearish and in the forthcoming sessions, the stock is likely to extend the decline to ₹3,300. Nevertheless, there can be a pause at ₹3,470. Hence, traders can initiate fresh short at current level and at ₹3,710. Initial stop-loss can be at ₹3,810. If the price falls to ₹3,470, book 50 per cent profit and shift stop-loss to ₹3,600 for the rest. Wait for the target price of ₹3,300, where one can liquidate the remaining shorts.

Union Bank of India (₹46.15)

Bulls might regain traction

The stock of Union Bank of India has been largely moving in a sideways trend since the beginning of the year, within its long-term downtrend. However, following the breakout of the hurdle at ₹42 last week, the near-term outlook has turned positive. Although price dropped last week, the likelihood of a gain from here is high. In the coming weeks, the stock is likely to gain towards ₹52 and then possibly to ₹58, which can be a strong resistance. Hence, traders can buy the stock at ₹46 and then accumulate if price drops to ₹42. Place stop-loss at ₹40. Since there can be slowdown at ₹52, book 50 per cent profit at this level. For the remaining longs, revise the stop-loss upwards to ₹45 and then wait for the target of ₹58.

United Spirits (₹947.3)

Sees fresh breakout

The stock of United Spirits saw a price correction after reaching ₹900 levels in the first week of October. As a result, the price started to drop after a brief consolidation. But the stock regained strength on the back of the support at ₹810 and appreciated last week. Consequently, it made a higher high and it is now in a position to extend the rally in the coming sessions. Nevertheless, there is a possibility for the scrip to retest ₹900 before moving towards the psychological level of ₹1,000 — the target price for the longs. So, traders can initiate fresh longs at ₹940 levels and accumulate when the stock softens to ₹900. Place initial stop-loss at ₹875. But when the stock crosses over ₹950, start trailing with a dynamic stop-loss with a span of the daily average true range (ATR).

Published on October 30, 2021

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