Technical Analysis

Movers & Shakers: Stocks that will see action this week

Akhil Nallamuthu BL Research Bureau | Updated on May 15, 2021

Asian Paints (₹2,774.5)

Breaks out of consolidation path

The stock of Asian Paints looked weak since the beginning of 2021, i.e., it has been on a decline since registering a fresh lifetime high of ₹2,873.4 in early January. By the end of February, the scrip had hit a low of ₹2,260, thereby losing about 21 per cent from its high. Following this, the stock started to recover. But since the beginning of April, the trend was flat wherein the stock was oscillating between ₹2,500 and ₹2,670. But on Friday, it broke out of the consolidation range with huge volume, affirming the positive outlook. Rather than going long at current levels, traders can buy if price softens to ₹2,720 for better risk-reward; stop-loss can be at ₹2,640. On the upside, the stock could retest the prior high of ₹2,873 and could even touch ₹2,900.

Larsen & Toubro (₹1,415.5)

Realigning with uptrend

The stock of Larsen & Toubro (L&T) established a strong rally in November after breaking out of the key level of ₹1,000. Following this, it hit a fresh 52-week high of ₹1,593 in February. But it could not extend the rally as the price band between ₹1,570 and ₹1,600 acted as a strong hindrance. So, after a brief period of consolidation, the stock price began to fall. Consequently, the scrip made a low of ₹1,306 a month ago. Since ₹1,300 is a support, where 38.2 per cent retracement level of the previous rally coincides, the decline was arrested. Over the past month, the stock has been exhibiting positive signs and last week, it breached the resistance at ₹1,400, turning the outlook positive. So, traders can buy the stock with a stop-loss at ₹1,370 for a target of ₹1,500.

OFSS (₹3,694.4)

Bulls attempting comeback

The stock of Oracle Financial Services Software (OFSS), after experiencing substantial sell-off in March last year, swiftly reversed the trend upwards after taking support at ₹1,500 levels. The stock price accelerated upwards in the following months. However, after hitting ₹3,200 in late July last year, the stock lost steam and the uptrend slowed drastically. Though the price action consistently showed bullish bias, it could not really sustain beyond ₹3,400 and ₹3,500. But last couple of weeks have been good for the stock; last week, it decisively closed above the resistance at ₹3,500. The bulls seem to be regaining traction and the stock is likely to advance from here. So, one can initiate fresh long positions with a stop-loss at ₹3,550 for a target of ₹3,940.

Bandhan Bank (₹280.5)

Sellers gaining control

Post marking a 52-week high of ₹430.7 in December last year, the stock was largely trading with bearish inclination. It fell sharply in January, the support at ₹300 helped prevent further downfall. After the decline, the stock found it difficult to rally where it was largely tracing a sideways trend, fluctuating between ₹325 and ₹360. But the current month has not been good for the stock as sellers seem to be gaining grip; the stock breached the support at ₹325 and last week, it closed below the ₹300-mark, giving it a weak outlook. Supporting this, indicators like RSI and MACD on the daily chart are now in bearish zone and higher volume can be observed along with decreasing price. So, traders can be bearish and sell with a stop-loss at ₹290; target can be ₹262.

DLF (₹250.5)

Remains below key support

The stock, which saw a stellar rally between November and March, appreciated from about ₹150 and made a new one-year high of ₹332.7 during this period. Thus, the price more than doubled. However, ₹330 being a strong resistance, the stock failed to move beyond this level and started to correct. The corrective decline became a trend reversal in mid-March as it slipped below the important level of ₹300 and the downtrend continued. After marking a low of ₹231.5 last month, the stock moved up. Nevertheless, it could not rise above the hurdle ₹265 and on the back of this, the stock saw a sharp decline last week. So, the price rise is nothing more than a corrective rally. Hence, one can take a bearish view and short with a stop-loss at ₹262; target can be ₹230.

Published on May 15, 2021

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