Technical Analysis

Stocks that will see action this week

Akhil Nallamuthu | Updated on December 26, 2020

HCL Technologies (₹919.3): Marks fresh all-time high

A rally that began in March this year from around ₹400 took the stock of HCL Technologies to a then lifetime high of ₹910. But subsequently, the scrip began to depreciate gradually as the upswing lost traction.

However, the decline was arrested at ₹800 from where the uptrend started to gather steam, and this time the bulls had enough strength to make a higher high — the stock made a fresh lifetime high of ₹935 on Wednesday. There was a strong bounce off the support at ₹850, where the 21-day moving average lies.

This has brought back the positivity and the price action hint at more to the upside. Hence, traders can be bullish and buy the stock on declines with a stop-loss at ₹850. Potential short-term targets can be ₹1,000 and ₹1,020.

Hindustan Unilever (₹2,402.2): Sets sight on fresh 52-week high

The stock of Hindustan Unilever has largely been trading sluggish since May this year. Most part of the time since then, the scrip was kept under an important level of ₹2,250 by the sellers. The only time it crossed over this hurdle since May was in July, where it touched ₹2,350.

However, bears quickly responded, dragging the stock back below ₹2,250. But December has been a different story — the stock began to run northwards and successfully breached ₹2,250, and has pipped above ₹2,400-mark, giving it a bright outlook.

One can also observe a breakout of a sideways range — ₹2,300-2,385 — within which the scrip has been fluctuating for the past few days. So, traders can go long with a stop-loss at ₹2,260 and look for a target of ₹2,610 and ₹2,660.

Cipla (₹833.2): Back on upward track

The stock of Cipla, which has been riding the bull wave since March, from about ₹370, first faced an obstruction at around ₹815 in August. What followed was a corrective decline during which the price moderated to ₹705.

Following this, the scrip attempted to move beyond ₹815 thrice in the last three months only to fail, making it a significant resistance. This led to a horizontal price action — the stock was traversing between ₹700 and ₹815 since August.

But, bulls seem to have found a way now and, consequently, it decisively breached the resistance of ₹815 and proceeded to hit a fresh all-time high of ₹834.9 on Thursday. These factors indicate that the stock is likely to run up from the current levels and so, one can buy with a stop-loss at ₹800 for a target of ₹895.

Tata Consumer Products (₹601): Strong comeback by bulls

Even though the stock had been trending up with considerable strength since March, it faced a substantial downward pressure in September. Between early September and the final week of October, bears made an onslaught, wherein the price dwindled by about 22 per cent — it declined from ₹592 to ₹459.

Just when it looked like the sellers overwhelmed the buyers, the trend reversed swiftly because of strong buying at lower levels. Fresh longs ensured that the bullish reversal is sustainable, which can be seen from the fact that the stock has now broken out of a prior high and made fresh lifetime high of ₹616.1 on Thursday.

The stock can make further progress upwards. Hence, traders can initiate fresh buys with a stop-loss at ₹560. Targets can be ₹675 and ₹700.

ACC (₹1,614.6): Bears gain a grip

The stock of ACC, after taking support at ₹1,300 in September, advanced to make a fresh 52-week high of ₹1,785 early this month. But unable to extend the rally, the scrip started to give up the gains gradually.

The downswing gained momentum and pulled the stock to ₹1,485 — its two-month low — last Monday. Thus, the price fell below both the 21- and 50-day moving averages. Moreover, the stock fell with huge volume on Thursday. These factors signal that the stock might be up for a bearish reversal.

Supporting the same, the relative strength index and the moving average convergence divergence indicators on the daily chart have slipped into negative territories. So, traders can short the stock on rallies with a stop-loss at ₹1,710; the price could fall to ₹1,485.

Published on December 26, 2020

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