Technical Analysis

Movers and Shakers: Stocks that will see action this week

Akhil Nallamuthu |BL Research Bureau | Updated on: Jun 25, 2022

Here is what the charts say about the shares of Coforge, HPCL and India Cements

Coforge (₹3,647.35)

Tracing a falling channel

The stock of Coforge Ltd has been falling since the beginning of 2022. It had faced resistance at ₹6,100. The scrip, which bounced over the past couple of weeks off the price level of ₹3,240, is currently trading at ₹3,647. Notably, it is now at the top of a rising channel, which is a resistance. Also, 50-day moving average resistance is at around ₹3,765. Therefore, the likelihood of a reversal from now is high. Even if there is a recovery, it can be limited to ₹3,900.

Traders can initiate shorts worth 75 per cent of the total intended amount now and add shorts for the remaining if price rallies to ₹3,900. Thus, the average shorting price would be ₹3,710. Place stop-loss at ₹3,950. Tighten it to ₹3,625 when price falls below ₹3,450. Liquidate all the shorts at ₹3,240.

HPCL (₹219.85)

Further fall likely

The stock of Hindustan Petroleum Corporation Ltd (HPCL) has broadly been trading in the broad range of ₹170-330 since early 2018. The latest leg of downtrend began in November 2021 from the range top. Since then, it has been dropping steadily. Although it posted a gain last week, it will most probably be a corrective rally and the scrip is expected to resume the fall.

The rally might probably extend to ₹232 but not beyond. Given the above factors, traders can short in two legs. That is, initiate short now and on a rally to ₹232 so that the average selling price would be around ₹226. Keep initial stop-loss at ₹250. When price dips below ₹200, alter the stop-loss to ₹220. Exit the shorts when the stock touches ₹170 since there can be a bounce of this support.

India Cements (₹158.1)

Stays below key level

The stock of India Cements witnessed a bearish trend reversal in January this year after facing resistance at ₹255. It has been falling since then and as an extension of the down-move, the stock price fell below an important level of ₹165 a month ago. As the scrip sustains below this level, the chances are high for it to see a decline from here. But there could be a minor rally to ₹165 before falling below ₹145. Therefore, one can short the stock now and on a rally to ₹165.

The average short price would then be ₹162. Initial stop-loss can be at ₹175. Tighten it to ₹150 when price slips below ₹131. On a decline to ₹124, book 50 per cent of the total shorts and then revise the stop-loss to ₹145. Liquidate the remaining shorts when price touches ₹115.

Published on June 25, 2022
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