Technical stocks to watch out for on Monday

Vinayak Gangule
/ Categories: Trending
Technical stocks to watch out for on Monday

Finolex Industries: Considering the daily timeframe, the stock has given a pennant pattern breakout. This breakout was confirmed by the robust volumes. The height of the pennant’s pole is almost 125 points. A pennant is a short-term trend continuation pattern and the breakout above the downward sloping trendline signals that the previous uptrend has resumed. The positive crossover on the daily RSI supports the overall price structure, which is trading above the 60 mark since November 03, 2020. Further, the average directional index (ADX), which shows trend strength, is above 40 on the daily chart and above 30 on a weekly chart. Generally, levels above 25 are considered a strong trend. In both the timeframes, the stock is meeting the criteria. Talking purely about the trading levels, the zone of Rs 620-Rs 610 level is a crucial support area and the level of Rs 670-Rs 676 is an immediate resistance zone.

Kansai Nerolac Paints: On Friday, the stock has given a downward sloping trendline breakout on the weekly timeframe, formed by connecting swing highs from December 2017. This breakout is confirmed by the above 50-week average volume, indicating a strong buying interest by the market participants. Currently, the stock is trading above its short and long-term moving averages. Talking about the indicators, the weekly RSI is in a bullish zone as well as in a rising mode. The per cent K is above the per cent D on both the weekly as well as the daily timeframe, which indicates further strength. Considering all the above factors, we expect the bias to remain positive as long as the stock sustains above the zone of Rs 533-Rs 527 as it is a confluence of the upward sloping trendline support and short-term 20-day EMA level. On the higher side, the previous swing high of Rs 573, followed by Rs 580, would be seen as the next resistance zone for the stock.

Motilal Oswal Financial Services: The stock has given a neckline breakout of Adam & Adam double bottom pattern as on November 14, 2020, and thereafter, witnessed over 10 per cent upward momentum in the next three trading sessions. After registering the high of Rs 638.50, the stock has witnessed consolidation for the next nine trading sessions along with low volume. However, on Friday, the stock has given a consolidation breakout on the daily timeframe. This breakout is confirmed by robust volume. Additionally, the stock has formed an opening bullish Marubozu candlestick pattern on the breakout day, which indicates extreme bullishness. The stock's relative strength index (RSI) has reached its highest value in the last 14-days, which is bullish. Also, it has managed to close above its prior swing high. Hence, we expect the bias to remain positive as long as the stock sustains above Friday’s low of Rs 616.95 level. On the higher side, the level of Rs 664-Rs 670 would be seen as the next resistance zone for the stock.

Prism Johnson: The stock has formed a bullish pin bar candlestick pattern as on the weekend of March 27, 2020, and thereafter, marked the sequence of higher tops & higher bottoms. The stock has witnessed over 240 per cent upside momentum from the low of Rs 25.75, which was registered on March 25, 2020. Currently, the stock has given a 14-days consolidation breakout, which suggests further upside momentum. This breakout is confirmed by robust volume. Talking about the indicators, the leading indicator i.e. the 14-period daily RSI is trading above the 60 mark since October 06, 2020. 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, the 20-day EMA level is likely to act as immediate support for the stock, which is currently placed at the level of Rs 80.35. 

Sumitomo Chemical India: The stock is trading above its short and long-term moving averages. The leading indicator i.e. the daily RSI is in a super bullish zone and it is in a rising trajectory. Currently, the stock is on the verge of giving a breakout of a downward sloping trendline resistance on the daily timeframe. If it moves above the zone of Rs 310-Rs 312, then we may see a bullish momentum in the stock.

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