Technical Analysis

Stocks that will see action this week

Akhil Nallamuthu | Updated on February 06, 2021

UltraTech Cement (₹6,352.1): Marks fresh lifetime high

After showing sluggish price action over two weeks since mid-January, the stock of UltraTech Cement saw tremendous increase in upward momentum. As a result, the scrip rallied past the prior high of ₹5,831.8 last week and hit a fresh lifetime high of ₹6,399 on Friday before closing the week a little lower at ₹6,352.1.

Thus, the bulls seem to have come back with strong intentions to lift the price of the stock further, and the breakout volume looks good. Corroborating the bullish bias, the relative strength index is showing a fresh uptick and the moving average convergence divergence indicator on the daily chart has started to trace an upward trajectory.

So, one can go long with a stop-loss at ₹6,040 and look for a possible target of ₹6,700.

Bajaj Finance (₹5,538.5): Resumes uptrend after a break

The stock of Bajaj Finance established an uptrend in early November last year from about ₹3,300 levels. The rally continued for a couple of months, but in January, the stock lost steam and the price began softening.

After marking a high of ₹5,372 by the end of December, the scrip corrected and made a low of ₹4,686 in the subsequent months, thereby losing nearly 13 per cent. But the price band of ₹4,660-4,700 acted as a support. On the back of this support, buyers entered, and the stock developed enough momentum to exceed the previous high, and marked a fresh all-time of ₹5,627 on Friday.

This has opened the door for further strengthening and, hence, traders can buy the stock with a stop-loss at ₹5,300, and ₹5,950 as the potential target.

DLF (₹305.3): Rebounds firmly post-correction

The stock of DLF, which has been accelerating since early November last year, faced a sharp correction a couple of weeks ago. From the then high of ₹299.5, the scrip lost about 16 per cent as it touched ₹251.5 last week.

But just like how the corrective decline occurred quickly, the recovery was no less than a solid bounce. The price of ₹250, acting as a support, helped the stock attract more buyers, which is evident from the volume with which it jumped off that level. There was sufficient upward thrust to lift the stock above the previous high and above the ₹300 mark.

Notably, the scrip made a fresh 52-week high of ₹314.9 before wrapping up the week at ₹305 levels. Since the momentum looks good, traders can go long with a stop-loss at ₹290 for a target of ₹330.

Siemens (₹1,839.9): Breaches a crucial resistance

Without much volatility, the stock of Siemens has been steadily gaining since June 2020. The rally began from about ₹1,025 and it progressed to ₹1,700 levels by the end of January. However, the price level at ₹1,715 stood firm as a hurdle.

Importantly, this is the resistance level, reacting to which the stock had fell sharply in November 2019. Though it was not a repeat, the stock price moderated after it reached that level a couple of weeks ago. This resulted in the price declining to ₹1,565. However, the scrip rebounded from that level last week and breached the resistance at ₹1,715 with considerable volume.

It then made a fresh lifetime high of ₹1,878 before ending the week near ₹1,840. So, one can buy with a stop-loss at ₹1,775; target can be ₹1,950.

Avenue Supermarts (₹2,946): Bulls orchestrate a comeback

While the stock of Avenue Supermarts had a good run up between October and December last year, it began 2021 on a volatile note. After making a fresh all-time high of ₹3,137 in mid-January, the scrip fell off.

Even as the stock attempted to get back to the upward track by taking support at ₹2,700 two weeks ago, the upswing could not sustain, and the stock depreciated to mark a low of ₹2,610 by the end of last month. Nevertheless, the scrip bounced back with good volume after finding the 50-day moving average support.

It then made a higher high on the daily chart, improving the prospect for the bulls. Considering these factors, traders can buy the stock with a stop-loss at ₹2,800. Target can be near the previous high — ₹3,130.

Published on February 06, 2021

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