Technical Analysis

Movers & Shakers: Stocks that will see action this week

| Updated on April 11, 2021

Wipro (₹450.1)

Gaining good bullish momentum

The stock of Wipro, which had been rallying since April last year, entered a corrective phase in mid-January this year. The scrip showed some sort of bearish bias as it has been making lower highs and lower lows. However, it was not an all-out downtrend even though the price slipped below both 21- and 50-day moving averages. The price band of ₹400 and ₹410 offered good support and in fact, the stock bounced off the support at ₹400 last week. The rally has taken the price back above both moving averages mentioned above and the resistances at ₹425 and ₹440. The price action on the daily chart i.e., a rally followed by a corrective decline and a strong bounce, is synonymous with a bull trend. Hence, traders can buy with a stop-loss at ₹435 for a target of ₹475.

NMDC (₹145.2)

Registers three-year high

The stock of NMDC established an uptrend in April 2020 from about ₹62 and considering the latest price, the stock has more than doubled, indicating a considerable upward momentum. However, the rally was not easy as the scrip faced a good number of corrections that were deeper, thus adding to the volatility of the stock. Nevertheless, the 200-day moving average has been acting as a good base against which it had bounced several times during the past one year. Similarly, the stock bounced on the back of the 200-day moving average before a couple of weeks and broke out of the prior high. Consequently, it marked a fresh 52-week high of ₹146.2 on Friday and the chart hints at further upside. So, traders can go long in the stock with stop-loss at ₹140; target can be ₹155.

IGL (₹542.5)

Outlook turns positive

The latest leg of rally in the stock of Indraprastha Gas Limited came after it took support at ₹366 in October last year. Prior to that it was trading with a bearish bias for several months. But the uptrend that began in October lifted the stock in the subsequent months where it registered a fresh lifetime high of ₹594.8 in mid-February this year. However, post hitting that price, the stock saw its price drop towards ₹500 quickly. Nevertheless, the downtrend did not extend and for the past six weeks, the stock has largely been moving in a sideways trend between ₹485 and ₹535. As the rally last week was accompanied by good volume, the scrip was able to crack the resistance at ₹535. So, one can buy the stock with a stop-loss at ₹520 for a target of ₹575.

Tech Mahindra (₹1,053)

Bulls gaining traction

The stock of Tech Mahindra, which was gaining steadily since July last year, doubled in price as it rallied from about ₹540 to mark a high of ₹1,081.5 in January this year. But since then, the stock has been sluggish as the bulls lost steam to take it further northwards. The price movement since the last week of January shows that the scrip has largely been oscillating between ₹920 and ₹1,035. However, the bulls gathered enough strength to break out of the range and therefore it closed at ₹1,053, opening the door for further strengthening. The breakout volume is good and so the stock is likely to extend the rally. This is also supported by indicators such as RSI and MACD. Hence, traders can take fresh longs with a stop-loss at ₹1,015; target can be at ₹1,100.

Bajaj Finance (₹4,872.3)

Breaches a key support

The stock of Bajaj Finance, which began its upward journey in June last year from about ₹2,000, continued to rally and registered a fresh lifetime peak of ₹5,822.2 in mid-February. But notably, even as the scrip hit new highs, indicators such as the RSI and MACD failed to follow; they had started to exhibit negative divergence since last December. Thus, the trend reversed a couple of months back and it has been forming lower highs and lower lows. Following this, the stock slipped below the key level of ₹5,000 and the 21-day moving average has now fallen below the 50-day moving average. These factors signal that the bears could drag the stock further downwards and so, traders can consider initiating fresh short positions. While ₹5,060 can be the stop-loss, ₹4,600 can be the near-term target.

Published on April 10, 2021

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