Technical Analysis

Movers and Shakers: Stocks that will see action this week

Akhil Nallamuthu | Updated on: Jan 08, 2022
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Asian Paints (₹3,576.3)

Marks a fresh all-time high

The stock of Asian Paints is on a secular uptrend. But in October 2021, it saw a price correction which was stopped at the support of ₹2,900. Post this, the stock resumed the uptrend and on Friday it marked a fresh high of ₹3,582. Going forward, the bulls are likely to lift the stock further up and a rally to ₹4,000 within a couple of months is highly likely. Although, there can be a pause at ₹3,870. Notably, the scrip might retest the resistance-turned-support at ₹3,465 before beginning its journey to ₹4,000.

Traders can buy at current levels and add more longs if price moderates to ₹3,465. Place stop-loss at ₹3,350. When the stock appreciates to ₹3,870, book three-fourth of the holdings and revise the stop-loss to ₹3,600. Exit the remaining longs when price hits ₹4,000.

Hindalco Industries (₹493.1)

Bulls gaining traction

After registering a fresh life-time high of ₹551.85 in October last year, the stock of Hindalco Industries saw a considerable decline in price. It made a low of ₹407.1 in November. But since then, the scrip has been on a recovery, and it crossed over the resistances at ₹468 and ₹482. Thus, the bulls seem to be gaining traction and the outlook is positive for the stock. Even though ₹500 can be a hurdle, the stock is expected to ease past this level and retest the previous high of ₹551.85. But there could be a minor decline in price from here.

Traders can buy at current levels and accumulate more when there is a dip to ₹476. Keep stop-loss at ₹460. At ₹530 exit say, 60 per cent of the longs and the balance 40 per cent at ₹550.

Guj Fluorochemicals (₹2,730.1)

Steady uptrend

The stock of Gujarat Fluorochemicals has been on a steady uptrend since March 2020. It has been consistently forming higher highs and higher lows. A regular bounce-off either from the 21-day moving average (DMA) or 50-DMA can be observed, especially since May last year. Therefore, as it stands, the likelihood of the stock extending the rally from the current levels is high. But the historical price action suggests a regular minor pull backs within the upswing and so, a moderation to ₹2,525 is a possibility.

Go long and accumulate on a decline to ₹2,525 with an initial stop-loss at ₹2,400. On the upside, the stock can touch ₹3,000 and ₹3,070 within two months. So, liquidate 75 per cent when price reaches ₹3,000 and the the balance at ₹3,070.

India Cements (₹239.9)

Hits multi-year high

The latest leg of rally in the stock began in March 2020 from about ₹75. Although there were periods of consolidation and correction, the overall direction of the trend stayed up. Last week, the stock gathered enough momentum to breach a multi-year resistance of ₹225, opening the door for further strengthening.

The bulls will most probably retain their momentum and we might see a swift rally going forward. Key price points on the upside are at ₹280 and ₹300. Nonetheless, the stock is likely to retest ₹225. Therefore, buy the stock now and add more shares if there is a correction to ₹225. While the ultimate target for these longs can be at ₹300, considering that ₹280 is an important level, one can exit half of the positions at ₹280 and the remaining at ₹300.

Dhani Services (₹159.5)

Bears at an advantage

The long-term trend of the stock of Dhani Services is bearish. While the stock was consolidating between ₹165 and ₹230 since April 2021, it broke the range on the downside a couple of weeks back and continues to stay below ₹165. Since the major trend is bearish, the stock can be expected to attract fresh sellers and could make new lows. Even when the broader markets recover, the stock remains a laggard, indicating an inherent weakness.

The nearest support for the scrip can be seen at ₹132. But there could be a minor appreciation to ₹170 before starting the downswing to ₹132. So, one can short at current levels and sell more when price rises to ₹170. Place initial stop-loss at ₹180 and change it to ₹160 when the stock falls below ₹140. Exit the short position at ₹132.

Published on January 10, 2022

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