Movers and Shakers: Stocks that will see action this week

Bulls continue to dominate

The stock of Ambuja Cements, which reversed the trend upwards after a sharp fall in March 2020, has been rallying strongly without any hiccups. The upward movement has been steady with minor intermittent corrections. In August this year, after reaching ₹427, the stock started to move downwards. But the decline was arrested in the price band of ₹385 and ₹400 which acted as a good base. Notably, this price area lies within the 21- and 50-day moving averages and in the past one year, the stock has rebounded several times from such areas. In line with this behaviour, it started to move up from a similar price area a couple of weeks ago. It broke out of prior high, increasing the likelihood of further appreciation. So, one can buy with a stop-loss at ₹424 for a target of ₹460.

Invalidates critical resistance

The stock of InterGlobe Aviation (IndiGo) rallied between August and November 2020. During this period the price appreciated from ₹870 to reach ₹1,760 levels. But following this, the stock completely lost track. While it did not witness any kind of a bear trend, it was unable to push upwards and was largely trading within a broad range of ₹1,500 and ₹1,850. The scrip made several attempts to break out of this region since the beginning of 2021 only to fail. However, the rally that began in the third week of August this year was very strong and had enough momentum to lift the stock above the resistance at ₹1,850. The bounce was on the back of 200-day moving average, which was at around ₹1,640. Use the declines to go long with stop-loss at ₹1,850. Target can be ₹2,150.

Breaks out of consolidation

After bottoming out at ₹234 in March last year, the stock of Marico turned the trend bullish and started moving upwards. But it lost momentum towards the end of last year. As a result, it entered a sideways trend wherein it was oscillating between ₹390 and ₹433 between December and April. During the last week of April, the stock gathered strength and broke out of ₹433. However, it lost traction in June and once again the stock found itself in the consolidation phase. While the price band of ₹510 and ₹525 provided support, the upward movement was blocked by the resistance at ₹550. The stock seems to be following the earlier pattern, like how it invalidated ₹433 in April, as it rallied and breached ₹550 last week. So, buy the stock with a stop-loss at ₹545; target at ₹590.

Resumes uptrend

The stock of Dr. Reddy’s Laboratories saw its price soar between March and September last year when it appreciated from about ₹2,500 to reach ₹5,500 level. Thus, the price more than doubled in a span of six months. However, it started to face considerable selling pressure at those levels and consequently, the price dropped. Notably, the stock saw a bad beginning to 2021, i.e. it tumbled from about ₹5,440 in January to ₹4,300 in mid-March, thereby losing 21 per cent. While the stock tried to get past the barrier of ₹5,600 in July, it again failed and saw a quick price decline to ₹4,500. But since past two weeks, the stock has been on an uptrend and formed higher high. Besides, RSI and MACD are showing positive signals. Thus, one can buy with stop-loss at ₹4,780; target can be ₹5,050.

Bounces off strong support

The stock was on a downtrend between August and November last year as a result of which the price depreciated from ₹4,000 to ₹3,400. While the decline was stopped by the support at ₹3,400, the stock was largely held within a broad sideways trend until recently. That is, the scrip was treading within ₹3,400 and ₹3,800. Yet, last week, the stock managed to cross over the hurdle at ₹3,800 and also closed above the important level of ₹4,000. This was powered by the rally which was established early August. It also hit a fresh lifetime high of ₹4,134.7 on Friday and the daily price action shows that there is more scope on the upside. Indicators like RSI and MACD are indicating a steady uptrend. So, one can consider initiating fresh longs with a stop-loss at ₹4,000 for a target of ₹4,325.