Technical Analysis

Stocks that will see action this week

Akhil Nallamuthu | Updated on March 20, 2021

JSW Steel (₹440.5): Hits a lifetime high

Despite the broader market facing downward pressure over the past week, the stock of JSW steel stood strong against the bear strike and managed to close the week with a gain of 5.2 per cent. In fact, the scrip made a fresh lifetime high of ₹446.3 on Friday.

Prior to this, the stock was consolidating in a price range of ₹395-425 for about five weeks. The price action — a rally followed by a consolidation and then a breakout — indicates that the bull run may continue.

Moreover, the price has been forming higher highs and higher lows since April last year, and has been consistently bouncing off the 50-day moving average. Hence, the stock might gain further and so, traders can buy with a stop-loss at ₹425 for a target of ₹465.

ITC (₹223): Bulls gain traction

The stock of ITC has been having a volatile period since the beginning of 2021. It has been witnessing good amount of price swings even though it was largely held within the range of ₹200-220. While it rallied past ₹220 in early February and marked a high of ₹238.5, it quickly gave up the gains and got back into the price range.

For almost a month until now, the stock had been hovering between ₹200 and ₹210. But last week, it rallied on the back of significant buying volume and closed above the resistance of ₹220.

The volume profile looks steady, and so, the stock will most likely extend the gain from the current level. So, traders can buy the stock with a stop-loss at ₹212 and look for a target of ₹238.

Hindustan Unilever (₹2,312): Likely to extend the rally

Hindustan Unilever was one among the few stocks that performed well last week even as the broad market faced a sell-off. While it was tracing a sideways trend for most part of the week, it rallied sharply on Friday with strong volume.

As the stock rallied, it moved past both the 21- and 50-day moving averages and ended the week above the resistance of ₹2,300, potentially turning the near-term outlook — which had been uncertain until last week — positive. The scrip indeed has been inching upwards since the beginning of the month and the breakout has added fuel to the uptrend.

The breakout volume seems solid, and the stock is likely to post more gains in the upcoming sessions. So, one can go long with a stop-loss at ₹2,240 for a target of ₹2,420.

ICICI Bank (₹586.6): Breaches a key support

The stock of ICICI Bank, which has been rising since October last year from about ₹335, doubled and topped out at ₹679.4 in mid-February. Since then, it has been in a correction.

But the scrip found support at ₹600, on the back of which bulls tried to put out a fight against the sellers. While it had been able to hold on for a couple of weeks since early March, last week, the support was invalidated as the stock declined and wrapped up the session at ₹586.6.

Over the course of the decline, the stock slipped below both the 21- and 50-day moving averages, and has been forming lower highs and lower lows over the past month. Considering these factors, one can short the stock with a stop-loss at ₹612. The price is likely to drop to ₹540.

DLF (₹287.4): Exhibits bearish divergence

The stock of DLF established an uptrend in November last year, and the rally was stable up until mid-January. During this period, the stock price doubled as it ran up from about ₹150 to ₹300. Subsequently, it appreciated and marked a fresh 52-week high of ₹332.7 in early March.

However, the stock was more volatile during the rally, and even though the stock formed new highs, the indicators were not supportive. In fact, the relative strength index and the moving average convergence divergence on the daily chart are now showing negative divergence, an indication of bearish trend-reversal.

Besides, the stock depreciated below the 50-day moving average last week and breached the support of ₹293, adding to the bearishness. Hence, traders can sell the stock with a stop-loss at ₹300; target can be ₹268.

Published on March 20, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor