Technical Analysis

Movers & Shakers: Stocks that will see action this week

Akhil Nallamuthu BL Research Bureau | Updated on May 01, 2021

Grasim Industries (₹1,401.7)

Bulls take charge

The stock of Grasim Industries witnessed its biggest price correction of the past year. That is, after hitting a fresh life-time high of ₹1,472.7 in early April, the stock depreciated and fell to ₹1,262. Therefore, it lost nearly 15 per cent in a three-week period. However, the scrip reversed the trend and posted gains in all five sessions of last week, indicating a strong momentum. The price is now back above both 21- and 50-day moving averages and the price action on the daily chart hints at further appreciation in price. Moreover, indicators like the relative strength index and the average directional index are showing that the bulls are gaining considerable traction. Hence, one can buy the stock with a stop-loss at ₹1,340 and look for a potential target of ₹1,500, which will be a fresh high.

Divi’s Laboratories (₹4,062.3)

Hits new all-time high

The stock of Divi’s Laboratories, which made substantial gains in 2020, hit some rough patches as the year turned. The scrip turned more volatile and there were several price swings in both the direction, with no clear trend. The stock was largely consolidating between ₹3,340 and ₹3,900. However, after touching the 200-day moving average at around ₹3,180 in mid-March, it started to move up steadily and consequently broke out of ₹3,900 and even crossed the ₹4,000-mark and marked a fresh all-time high of ₹4,135 last week. The breakout volume looks good and the indicators, like the moving average convergence divergence and relative strength index, look bullish. So, traders can buy the stock with a stop-loss at ₹3,900. The stock can to appreciate to ₹4,300.

Tata Steel (₹1,034)

In a strong uptrend

The stock of Tata Steel established an uptrend in June last year. But it was in October when the stock’s rally became strong, and the price started to accelerate upwards. The stock doubled in three months when it reached ₹730 in early January. But then, it faced a minor correction post which it entered a consolidation phase wherein the stock was oscillating between ₹670 and ₹750. Towards the end of March, the scrip broke out of ₹750 and began its next leg of rally. The bull trend looks strong and, notably, the stock rallied past the psychological level of ₹1,000. The stock will most likely extend the upward movement in the forthcoming sessions and so traders can consider buying. But rather than buying at current level, go long if stock retests ₹1,000 with a stop-loss at ₹960; target can be ₹1,100.

HCL Technologies (₹899)

Slips below a support

The stock that began its upward journey in April 2020 overcame several hurdles and in January 2021, registered a new all-time high of ₹1,067. Following this, the stock price dropped and after moving in a sideways trend in the subsequent months, it gained again in April and moved above ₹1,050. But the scrip faced selling pressure and started to move southwards. Thus, the price band between ₹1,050 and ₹1,070 was acting as a considerable resistance for the stock. The decline continued and last week the stock closed near the support of ₹900. Nevertheless, the momentum and the volume build-up are in favour of downtrend and so the price is likely to fall further. So, traders can consider going short in the stock with a stop-loss at ₹940. The potential target can be at ₹820.

Colgate Palmolive (₹1,481.9)

Goes below long-term average

The stock of Colgate Palmolive, which has been appreciating since April 2020, started to lose steam by mid-December. Subsequently, it started to take a horizontal path i.e., it was largely fluctuating between ₹1,520 and ₹1,650. But the latest downswing in price that began a month ago dragged the stock below the support at ₹1,520 last week. Moreover, the price also slipped below the 200-day moving average, potentially turning the outlook negative. Substantiating this, the relative strength index and the moving average convergence divergence indicator on the daily chart entered their respective bearish zone and the average directional index shows that bears are stronger than bulls currently. So, traders can shortwith stop-loss at ₹1,520 for a target of ₹1,410.

Published on May 01, 2021

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