Movers & Shakers: Stocks that will see action this week

Akhil Nallamuthu |BL Research Bureau | Updated on: Aug 13, 2022

Here is what the charts say about the shares of Coal India and Elgi Equipments

Coal India (₹221.65)

Hits three-year high

Although there were intermittent price corrections, the trend in the stock of Coal India has been broadly up since October 2020. Extending the rally, it breached a critical barrier at ₹210 and made a fresh three-year high of ₹226.8 and closed at ₹221.65 last week. Going ahead, the stock could retest the resistance-turned-support level of ₹210. But then, it will eventually start moving up again. While ₹234 can be a hurdle, the stock is expected to move past that level and touch ₹260 over the medium-term.

So, one can buy the stock now and add more longs when price softens to ₹210. Place the stop-loss at ₹195. When the scrip goes above ₹234, alter stop-loss to ₹218. Once the stock appreciates to ₹260, exit all your positions since this is a strong resistance from where the price could fall.

Elgi Equipments (₹450.4)

Rallies to record high

Since the beginning of 2022, the stock of Elgi Equipments has been trading in a broad sideways range. That is, it has been oscillating between ₹270 and ₹415. But last week, the stock broke out of the resistance at ₹415, opening the door for further upside. The price movement prior to the sideways trend was bullish and so, the long-term trend is up. This makes the case stronger for the bulls. Yet, before rallying past ₹500, the price could moderate to ₹400. Therefore, one can go long on the stock in two legs.

Buy at the current level of ₹450. Then accumulate more when price declines to ₹400 so that the average price would be at ₹425. Place the stop-loss at ₹375. When the stock rallies past ₹500, tighten the stop-loss to ₹450. Liquidate all your positions when the price hits ₹550.

Published on August 13, 2022
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