Technical Analysis

Stocks that will see action this week

| Updated on January 03, 2021

Dabur India (₹534.2)

Further strengthening on the cards

The stock of Dabur India, which has been on a rally from about ₹425 since June 2020, lost traction in early October and entered a consolidation phase. For the last three months, the scrip was largely oscillating between ₹500 and ₹530. But the latest bounce off the support at the ₹500 has resulted in the stock breaking out of this range, following which it registered a fresh lifetime high of ₹540.5 on Wednesday. Supporting the bullish inclination, the stock has been forming higher lows since June. Also, the relative strength index and the moving average convergence divergence indicators are showing fresh positive signs and remain in their respective bullish territory. Hence, traders can buy with stop-loss at ₹520 for targets of ₹550 and ₹560.

JSW Steel (₹389.7)

The uptrend looks robust

 

For past three quarters, the uptrend in the stock of JSW Steel is on a cruise control and the prevailing price action indicates that the scrip is set to clock more distance on the upside. The price has been consistently pushed up as and the 21-day moving average catches up with a lag. This led to the stock sailing past the previous high of ₹300 before a couple of months. Further, the scrip registered a fresh 52-week high of ₹393.9 on Thursday. The uptrend looks steady and this is substantiated by the relative strength index, which is showing a fresh uptick. Similarly, the moving average convergence divergence indicator is positive. Hence, traders can go long in the stock with a stop-loss at ₹375. Though ₹400 can be a minor hurdle, stock can be expected to rally to ₹415.

L&T Infotech (₹3,699.3)

 

Confirms bullish ascending triangle

The stock of L&T Infotech, which was hovering around at ₹1,400 in April last year, saw a steady increase in price between April and September. But then, it went through a turbulent period in the subsequent three months. That is, since October, the scrip has been witnessing zig-zag price movement, raising questions over the durability of the rally. Whatsoever, the price has always been witnessing a bullish bias as it continued to trade above the 21-day moving average. during this period. Apparently, it formed an ascending triangle pattern with the horizontal resistance line at ₹3,420. Before a couple of weeks, the stock crossed over the bar and on the first day of 2021, it hit a fresh lifetime high. The indications are clearly bullish. So, one can buy the stock with stop-loss at ₹3,500 for a target of ₹4,000.

Motherson Sumi (₹164.1)

Registers fresh high post correction

 

Following a massive fall that began in January 2020, the stock tumbled and touched a low of ₹46.85 in March. However, the bulls were quick to respond and thus the stock started to recoup its loss quickly. Though not at the pace of the decline, the price accelerated considerably for the rest of the year. After breaking out of the critical level of ₹150 in early December, the bulls found it difficult to take the stock past the ₹160-mark. But right at the tail end of the year i.e., on the final trading session of 2020, the scrip broke out this resistance with good volume. This means, the stock after witnessing a temporary blip, is back on track to register more gains. So, one can buy the stock with a stop-loss at ₹156 and look for a near term target of ₹175.

Petronet LNG (₹249.8)

Displays bearish bias

The stock of Petronet LNG, which began to drift lower in mid-August last year from about ₹268, found support at ₹210. The scrip then reversed the path and started appreciating. Consequently, it retested ₹268 early last month. Despite a couple of attempts within a span of one week, the stock failed to breach this level. Bears then started to creep in and then the stock slumped before a couple weeks from now. The price dropped below the 21-day moving average and an important level of ₹250. In addition, the relative strength index and the moving average convergence divergence indicators has now entered bearish zone. Since the stock is likely to depreciate from current levels, traders can sell with a stop-loss at ₹258; target can be ₹235.

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Published on January 02, 2021
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