ICICI Bank (₹946.4)
Confirms inverted H&S
ICICI Bank’s stock closed in the green for the second week in a row. By closing at ₹946.4, it has surpassed both 20- and 50-day moving averages. Besides, it has confirmed an inverted head and shoulder (H&S) pattern on the daily chart. This hints at a bullish reversal. According to the pattern, the next leg of rally could lift the stock to ₹985 after seeing a minor drop in price to ₹930 from the current level.
But the chart shows that the upmove could extend to ₹1,000, as ₹985 is not a resistance. Therefore, go long on ICICI Bank at the current level of ₹946. Accumulate if the price dips to ₹932. Initial stop-loss can be kept at ₹910. Trail the stop-loss to ₹950 when the stock moves up to ₹970. Liquidate the longs at ₹995.
Signs of uptrend resuming
ITC’s stock closed last week on a strong note, courtesy the rally on Friday. This has led to the stock making a higher high and higher low, indicating the resumption of the uptrend after a corrective decline. Notably, the stock has bounced on the back of both the 20- and 50-day moving averages, improving the chances for the rally to continue.
We anticipate ITC share price to rise to ₹500 in the near term. Hence, traders can buy the stock of ITC at the current level of about ₹450. Add more shares to the holdings in case the price dips to ₹440. Place the stop-loss at ₹425 initially. Raise this to ₹450 when the stock touches ₹460. Lift the stop-loss further up to ₹470 when the price hits ₹480. Book profits at ₹495.
Trend reversal on the cards
Vedanta’s stock, towards the end of October, jumped after finding support at ₹212 for the second time in as many months. While the stock is now facing a trendline resistance at ₹242, the price action on the daily chart shows that the bulls are gaining traction. This could lead to the breakout of the resistance. A move above the trendline could also result in Vedanta’s stock confirming an inverted head and shoulder.
This pattern denotes a potential bullish trend reversal. Participants can buy Vedanta now at ₹239. Add more longs if the price softens to ₹228. Stop-loss can be at ₹205 initially. Modify the stop-loss to ₹255 when the price rallies to ₹265. Tighten the stop-loss further to ₹270 when the stock touches ₹280. Exit at ₹295.