Breaks multi-year resistance
The stock of Gujarat Narmada Valley Fertilizers and Chemical (GNFC) is on an uptrend since March 2020 from ₹100. After reaching ₹500, a multi-year resistance, in October last year, the stock lost momentum and was hovering in that region. But last week, the scrip breached this level with significant volumes, reinforcing the bullish momentum. This is likely to lift the stock to ₹645 in about three months, although there can be a pause at ₹600.
Also, there is a good chance that the stock will correct to ₹520 before heading further north from here. So, traders can buy now and accumulate when price softens to ₹520. The average buy price will be at around ₹542. Place initial stop-loss at ₹495 and alter it to ₹550 when price goes above ₹600. Exit the longs at ₹645.
Indiabulls Housing Finance (₹197.9)
In long-term downtrend
The stock of Indiabulls Housing Finance is on a long-term downtrend since August 2018. Within this major price swing, the stock has been moving across a broad sideways trend of late, largely within ₹210 and ₹285. But last week, bears dragged the stock below ₹210, and this also means the rising trend line support is breached, adding to the bearishness.
The price action hints at the beginning of a new leg of a downtrend, which can pull the stock down to ₹160, the nearest support. Subsequent support is at ₹140. Given the above factors, traders can be bearish and initiate fresh sell trades at current levels. Add more shorts when price rallies to ₹210 and place stop-loss at ₹225. When price touches ₹160, exit three-fourth of the shorts and tighten stop-loss to ₹180. Liquidate the leftover at ₹140.