Technical stocks to watch out for on Monday
Balkrishna Industries Ltd: The stock is forming a series of higher high and higher lows after registering a low of Rs 679 as on March 23. Considering the daily timeframe, the stock has given a 16-day consolidation breakout along with relatively higher volumes. With this consolidation breakout, the ADX, which shows the strength of the trend, turned upside and moved above -DI. As the stock is near its 52-week high, it is trading above all the short and long-term moving averages. The stock is meeting the criteria of Mark Minervini’s trend template. The current stock price is above both the 150-day (30-weeks) and 200-day (40-weeks) moving average price lines. Moreover, 30 and 40-weekly averages are trending up and at the same time, they are in the desired sequence. The RSI is currently quoting at 69.10 and it is in a rising trajectory. Hence, we expect the bias to remain positive as long as the stock sustains above Friday’s low of Rs 1,258.45 level.
Caplin Point Laboratories Ltd: On Friday, the stock has given a downward sloping trendline breakout, formed by connecting swing highs since June 2019. This breakout is confirmed by the above 50-day average volume. Currently, the stock is trading above its short and long-term moving averages. The leading indicator RSI is in a rising trajectory in both the weekly and the daily timeframe. The daily and weekly MACD stays bullish as it is trading above its zero line and signal line. Considering all the above factors, we expect the bias to remain positive as long as the stock sustains above the short-term eight-day EMA level, which is currently placed at Rs 402.40 level. On the higher side, the level of Rs 460, followed by Rs 467, would be seen as the next resistance zone for the stock.
Cholamandalam Investment and Finance Company Ltd: Considering the daily timeframe, the stock has given a rising wedge pattern. Along with this wedge breakdown, the stock has also managed to close below its weekly pivot and short-term moving averages, i.e. 13-day EMA and 20-day EMA. Among the momentum indicators, the 14-period daily RSI has cooled off after touching the zone of 65-68 and at present, its reading is 49.14. The RSI is trading below its nine-day average and it is in a falling mode, which indicates a further downside momentum. In case, the stock sustains below the level of Rs 200, it would invite further selling and it may test its swing low of Rs 195.80, followed by Rs 187 level. On the other hand, it is advisable to wait until the stock moves above Rs 218 level to create any short-term long position.
Dabur India Ltd: On Friday, the stock has given a downward sloping trendline breakout on the daily timeframe, formed by connecting swing highs since April 2020. Since the last three trading sessions, the volume is above the 50-day average, which is a sign of accumulation. Talking about the indicators, the RSI on the daily chart is in a rising trajectory. Further, the weekly RSI has managed to close above the 60-mark after a span of almost four months. The trend strength indicator ADX is at a healthy level of 23.98. The directional parameter +DI is much above the -DI. Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias. On the downside, important support for the stock is placed at the zone of Rs 494-Rs 490 and on the upside; an immediate resistance is seen at Rs 517, followed by Rs 525.
Sun Pharmaceutical Industries Ltd: Considering the daily timeframe, the stock has given a horizontal trendline breakout along with robust volumes. Additionally, the stock has formed a sizeable bullish candle on the breakout day, which adds strength to the breakout. The stock is meeting Daryl Guppy’s multiple moving averages set up rules as it is trading above both the short and long-term moving averages. Interestingly, the RSI has broken out of inverse head and shoulders like pattern, which is a very bullish sign. Moreover, the surge in +DI is suggesting that the trend will strengthen further. Hence, we expect the bias to remain positive as long as the stock sustains above Friday’s low of Rs 507.50 level.