Technical Analysis

Movers & Shakers: Stocks that will see action this week

Akhil Nallamuthu | Updated on March 27, 2021

Adani Transmission (₹870.6): Sees fresh breakout

The stock of Adani Transmission, which had been rallying since June last year, appreciated from about ₹160 and went past ₹400 in December. But from then on until late January, the scrip started to move in a sideways trend.

Nevertheless, the bulls regained traction in January and started to rally by taking support at ₹400, and this time the upward movement was so sharp that the price doubled within a month time. The 50-day moving average coincided at ₹400, thus acting as a strong support. But since mid-February, the stock had been in a consolidation phase, largely fluctuating within ₹730 and ₹850.

However, last week, it broke out of this range, opening the door for further strengthening. So, traders can buy with a stop-loss at ₹815; target can be ₹950.

Godrej Consumer Products (₹710.2): Bounces off a support

Broadly speaking, the stock of Godrej Consumer Products has not been trending since June 2020, and the scrip has been moving in a sideways trend, though it showed an upward bias.

Even though ₹650 and ₹720 remained the lower and the upper boundaries of the range, the stock attempted to breakthrough ₹720, and touched ₹760 in October and ₹800 in January. After briefly staying above ₹800, it declined and retested the support of ₹650 last week.

But since it is a strong support, the stock rebounded, and on Friday, rallied past the hurdle at ₹700, which had been holding back bulls for a month. The breakout looks solid and so the stock is likely to ease past ₹720. So, buy with stop-loss at ₹680; target can be ₹760.

Tata Steel (₹766.8): Breaches a resistance

The stock of Tata Steel has been on an uptrend since May 2020. Forming a solid base at around ₹260 levels, the stock established a rally, and has been appreciating consistently. After marking a high of ₹731 in the second half of January, the scrip faced a swift fall.

But on the back of the 50-day moving average, the stock quickly returned to the upward trajectory. Subsequently, it went past the prior peak and made a fresh 52-week high of ₹782.5 in early March. Nevertheless, in the past one month, the stock had been charting a sideways trend, oscillating between ₹700 and ₹750.

But on Friday, it broke out of the resistance at ₹750 with considerable volume, a bullish indication. So, buy with a stop-loss at ₹735; target can be ₹815.

Mahindra & Mahindra (₹799.3): Slips below a support

The stock of Mahindra & Mahindra, which had been witnessing a weak rally since December, is now showing signs of a potential downtrend. Though the scrip has been heading north since April last year, the last stretch of rally recorded since December was accompanied by bearish divergence in the relative strength index and the moving average convergence divergence indicator.

After hitting a 52-week high of ₹952 in early February, the stock has been moving downhill. While tracing a rectangular pattern over the past month — trading between ₹820 and ₹870— the stock broke down below the support at ₹820 last week.

From here, the stock will most likely depreciate; so, traders can sell the stock with a stop-loss at ₹840 for a target of ₹740.

Wipro (₹403.9): Registers lower lows

The stock of Wipro that set-off the rally in March last year, has seen its price appreciate quickly over the past 12 months. From its March low of ₹170.2, the price had nearly tripled when it registered a fresh lifetime high of ₹467.4 in mid-January this year.

However, since then, the bulls seem to be losing its mojo as the scrip has been depreciating gradually. Although it has been forming lower highs, the support at ₹410 offered the stock a good support. But this was breached last week, turning the outlook negative.

Supporting this, the relative strength index slipped into its bearish territory last week. Hence, bears seem to be gaining momentum and so, one can sell the stock with a stop-loss at ₹418. The target can be at ₹375.

Published on March 27, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor