Technical Analysis

Stocks that will see action this week

Akhil Nallamuthu | Updated on March 06, 2021

Avenue Supermarts (₹3,286.1): Makes fresh all-time high

In October last year, the stock of Avenue Supermarts rebounded from a support at ₹2,000, and what followed was a good rally. This was the second time it bounced off that support in a span of three months.

As the rally continued, it breached the critical resistance of ₹2,500 in early December, and by last week, it registered a fresh lifetime high of ₹3,330 before closing the week at ₹3,286.1. Last week, it took the support of the 50-day moving average and broke out with good volume.

These are indications that the stock could see more gains in the upcoming sessions. Hence, one can be bullish and go long with a stop-loss at ₹3,170. In the short term, the price is likely to touch ₹3,460, which can be the target for longs.

Reliance Industries (₹2,178.7): Breaks out of a range

The stock of Reliance Industries has been wavering on a sideways trend since November last year until February this year, between ₹1,840 and ₹2,100. Four months of sideways crawl came to an end last week as the scrip decisively breached the upper boundary of the band — ₹2,100 — and opened the door for further advances.

The price is above both the 21- and 50-day moving averages, and the average directional index is showing good strength in the upswing in price. Likewise, the moving average convergence divergence indicator and the relative strength index are in their respective positive territories.

These factors give the stock a bullish inclination. So, one can be bullish and go long with a stop-loss at ₹2,100. So, targets can be at ₹2,330 and ₹2,365.

Grasim Industries (₹1,339.3): On a strong uptrend

Since reversing the trend in March 2020, the stock of Grasim Industries has been rising steadily. Even as the broader market witnessed some hiccups, the stock managed to sail through volatile periods without much of a difficulty.

From its low of ₹385 made in the final week of March 2020, the scrip has multiplied by nearly 3.5 times as it ended at ₹1,339.3 on Friday. Interestingly, since April last year, the stock has been posting positive returns in all the months, indicating a robust uptrend. Last week, it hit a fresh 52-week high of ₹1,371.7 and will most likely continue to post more gains.

Given the above factors, traders can continue to be bullish and buy the stock with a stop-loss at ₹1,280. Target can be at the nearest resistance i.e., ₹1,440.

Bharti Airtel (₹532.8): Trades below a strong hurdle

The stock of Bharti Airtel, reacting to the important level of ₹550, had moved up in the first week of February and marked a new 52-week high of ₹623. However, it immediately reversed the trend and started to depreciate.

Similarly, the stock declined after reaching ₹610 levels in mid-January. Thus, the price band between ₹610 and ₹625 seems to act as a substantial resistance band. But unlike the decline that occurred a couple of months ago, the stock fell below the support of ₹550 last week with tremendous volume, indicating that the uptrend, which was established last October, might have come to an end.

That is, the short-term outlook is now bearish. So, traders can take fresh short positions with a stop-loss at ₹550 for a target of ₹500.

SBI (₹383.6): Slips below a crucial support

The stock of SBI witnessed a huge gap-up in early February. It looked like more fuel was added to an uptrend that had already been strong — the stock jumped from ₹355 to ₹387. The volume build-up over the preceding sessions were supportive of the rally.

However, the bulls were stopped abruptly, and the price action became sluggish. Since the first week of February, the stock has been largely held in a range. Though ₹390 stood as a firm support, it was unable to build and rally. As the consolidation prolonged, bears started to gain traction and, consequently, the stock broke below the support of ₹390.

Technical indicators, too, are showing weakness. So, traders can sell with a stop-loss at ₹395 for a target of ₹360.

Published on March 06, 2021

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