Technical Analysis

Movers & Shakers: Stocks that will see action this week

Akhil Nallamuthu BL Research Bureau | Updated on May 22, 2021

SBI Cards (₹1,064.2)

Renewed upward momentum

The stock of SBI Cards and Payment Services, after hitting a fresh life-time high of ₹1,139 in early March, reversed the direction and started moving downhill. The downtrend was quick so it slipped below the psychological level of ₹1,000 in mid-March. It then entered a consolidation phase, and the scrip was largely oscillating between ₹900 and ₹1,000. The stock attempted to break out of the resistance at ₹1,000 over the past few weeks. But it was blocked by 50-day moving average (DMA) and the resistance at ₹1,000. However, last week, the stock rallied and got beyond the ₹1,000-mark, turning the outlook positive. The 21-DMA is attempting to cross over the 50-DMA, a bullish signal. Considering these factors, traders can go long in the stock with stop-loss at ₹1,020 for a near-term target of ₹1,135.

ICICI Bank (₹642.4)

Bulls gaining traction

The stock of ICICI Bank established an uptrend in September last year by taking support at ₹335. It rallied in the subsequent months and in early February this year, it went past the resistance at ₹550 following which it hit a fresh 52-week high of ₹679.4 in mid-February. However, the stock witnessed good build-up of short at those levels and so it started to depreciate. The decline continued till April where it found support in the form of a price band of ₹540 and ₹550. On the back of this, the stock regained momentum and began to rally. Last week, it moved above the resistance at ₹635 and the price action indicates further appreciation. Hence, one can consider initiating fresh longs with a stop-loss at ₹620; target can be ₹674.

Bajaj Auto (₹4,125.5)

Breaches a key resistance

The stock of Bajaj Auto, which had rallied between last November and early April, swiftly reversed the trend. That is, the scrip, which began its rally from about ₹2,840, marked a new lifetime high of ₹4,361.4 in April and overturned the trend. It witnessed a considerable decline thereafter. But when it reached ₹3,500 a couple of months ago, it found support at this level against which the scrip turned the tide in its favour. Although it appreciated, it started to trace a sideways trend in May wherein it was largely fluctuating between ₹3,800 and ₹3,965. Last week, it broke out of this range and turned the outlook positive. The price pattern — a rally followed by a consolidation and then a breakout — is a bullish sign. Therefore, traders can buy the stock with a stop-loss at ₹4,000; target can be ₹4,325.

Pidilite Industries (₹1,978)

Registers fresh all-time high

The stock is in a secular uptrend and every price correction has been followed by a strong rally. Nevertheless, 2021 has not been very bullish for the stock so far as it was witnessing a sideways crawl since January i.e., it was held by the price levels of ₹1,670 and ₹1,830. Though there was a breakout in April, it did not sustain, resulting in the scrip falling back below ₹1,830. But since the beginning of May, the stock has been rallying well and the volume has also gone up, making the rally significant. The stock has also gone past the prior high of ₹1,928 and marked a fresh all-time high of ₹1,992 on Friday. Since the breakout has brought back the upward momentum in the stock, consider buying with a stop-loss at ₹1,900 for a target of ₹2,100.

Avenue Supermarts (₹3,034.1)

Goes past a strong hurdle

The stock of Avenue Supermarts rallied from ₹1,960 to mark a lifetime high of ₹3,330; this was the latest leg of rally which occurred between October and March. Though it has been rallying, the scrip started to show weakness since January itself. As a result, it saw a steep fall, resulting in it marking a low of ₹2,676 during the last week of April. But the stock was able to turn the tide in its favour as the major trend remained up. Yet, the daily chart shows that the stock has been facing stiff resistance at ₹3,000. But last week, the stock breached that level with good volume and also moved above the 50-day moving average, making the case stronger for buyers. So, one can buy the stock with a stop-loss at ₹2,940 for a target of ₹3,200.

Published on May 22, 2021

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