Sun Pharma (₹894)

Hits record high

The stock of Sun Pharmaceutical Industries is on an uptrend since March 2020. It has been forming higher highs and higher lows consistently. In line with this, it broke out afresh to make a new multi-year high of ₹902.85 last week.

The breakout is accompanied by good volume and the scrip sustains well above the key level of ₹850. Therefore, going forward, the stock is likely to appreciate to ₹1,000 — a psychological level in the next two months. But before that, it could see a minor dip to ₹862. However, a fall below ₹850 is less likely. So, traders can go long at current level and accumulate if price dips to ₹862, so that the average price will be around ₹878. Stop-loss can be at ₹838 but tighten it to ₹880 once the stock moves above ₹950. Liquidate the longs at ₹990.

Dabur India (₹569)

Head and shoulder seen

After losing for three consecutive weeks, the stock of Dabur India has gained of 6.6 per cent last week. Yet, the short-term is still bearish. Corroborating the weak outlook, the price action since July last year resembles a head and shoulder pattern, with the neckline resistance at ₹576. This pattern hints the stock could fall to ₹500. The stock could possibly extend the rally to ₹580 but is likely to start declining eventually thereafter.

A falling trend line that also coincides with the neckline resistance can be observed. This can also provide strong resistance. Thus, one can short the stock now and on a rise to ₹580. Keep initial stop-loss at ₹595. When it falls to ₹530, exit, say, 30 per cent of your position and revise the stop-loss to ₹570 for the rest. Exit the balance shorts at ₹505.

MindTree (₹3,965.9)

Weak in short term

Although the long-term trend of the stock of MindTree is up, a fortnight ago, it slipped below the lower boundary of the ₹4,165-₹5,000 range. This has turned the short-term outlook negative. However, we cannot rule out the possibility of the scrip retesting ₹4,165 before falling further.

The 21-day moving average lies at ₹4,200. Thus, the price band of ₹4,165-₹4,200 is where the stock could start the next leg of downswing. It is likely to drop below the prior low of ₹3,555 and touch ₹3,200 over the medium term. So, short the stock now and on a rise to ₹4,165 with stop-loss at ₹4,320. When the scrip falls below ₹3,555, exit 50 per cent and alter stop-loss to ₹3,900 for the balance positions. Liquidate the remaining shorts at ₹3,225.

Havells India (₹1,209.6)

Invalidates a key support

The stock of Havells India began its latest upswing in June last year from ₹975. However, after reaching ₹1,500 in September, the scrip made a U-turn. In mid-January, the stock had fallen below the support at ₹1,250, thereby turning the near-term trend bearish.

Though it appreciated by 5.9 per cent last week, it appears to just be a corrective rally. That is, going forward, bears could start dragging down the stock anytime. An extension of last week’s rally is not likely to top ₹1,250 whereas on the downside, it could fall to ₹975. Hence, traders can initiate shorts now and add more when it inches up to ₹1,250. Place stop-loss at ₹1,310. When the stock falls below ₹1,065, book 50 per cent of the shorts and change stop-loss to ₹1,170. Exit the leftover at ₹975.

Gillette India (₹5,117.5)

Steady downtrend

The long-term trend of the stock of Gillette India is down. The latest run southwards began in September 2021 after facing stiff resistance at ₹6,200. As the stock fell, it registered a fresh 52-week low of ₹5,110 last week.

The bears are expected to pull the price further down in the coming weeks. While ₹4,940 can be a support, the scrip will most likely decline below this and drop to ₹4,750 in about three months. But there is a slight chance for the price to move up to ₹5,350 before the drop. So, traders can deploy shorts worth three-fourth of the intended amount at current level and the remaining at ₹5,350. Place stop-loss at ₹5,555. When price falls to ₹4,940, revise down the stop-loss to ₹5,100. Liquidate all the shorts on a fall to ₹4,750.

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