Technical Analysis of BreakOut Stocks for Short Term Trading – February 25, 2022

BreakOut Stocks for Short Term Trading

Stock Recommendations
by Ruchit Jain Last Updated: 2022-02-25T22:52:24+05:30

Read here about breakout stocks, its meaning and what are the breakout stocks for today.
 

Breakout Stocks: What are the breakout stocks for today?

A breakout is a phase where stock price moves outside a consolidation with increased volumes. Such breakouts generally lead to good price movement in short term and this is one of the proven method for selecting buy best share to trade for short term. In this column, we inform our readers the breakout stocks today which can be considered as best short term stocks.

We cover the stocks which have given a breakout from the resistance or stocks which have broken their important support levels. Shares which given a breakout above its resistance with good volumes should be referred for bullish trades which stocks which breaks their supports should be referred for bearish trades. 
The stocks given are for reference and traders are advised to take their own decision and trade with proper money management.

Today, we have picked two stocks – one with a bearish set up and one with a bullish set up as per technical analysis

Best Stocks to Trade for Short Term


1. Havells (SELL)

 

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After a sharp correction in the month of January, the prices have seen a consolidation within a range in last few weeks. This correction and then a consolidation have led to formation of a ‘Bearish Pennant’ pattern on the daily chart. Also, this entire recent consolidation has been below its short term moving averages and the ’20 EMA’ on the daily chart has been acting as a resistance. The relative underperformance of the stock recently is not a good sign and if the prices break below the support of 1140, then it could result into further correction in prices. The volumes in the recent correction were high and there’s no buying interest seen in pullback move. 
Hence, short term traders can look for shorting opportunities if the stock breaks the support of Rs.1140 with a stoploss then placed above Rs.1180 for potential short term targets of 1100 and Rs.1070. 

Havells Share Price Target - 

Sell Range – Below Rs.1140
Stop Loss – Rs.1180
Target Price 1 – Rs.1100
Target Price 2 - Rs.1070
Holding Period – 1-2 weeks

(The given levels are of cash segment which can be used as reference to trade in futures segment)


2. GNFC (BUY)
 

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Recently post the announcement of its quarterly results, the stock had seen a buying interest and had given a breakout from its resistance with a gap up. The stock rallied higher with good volumes and has now seen a pullback as the broader markets witnessed correction. However, the volumes on pullback move are low and the previous breakout level has now become a support.

The stock has been forming a ‘Higher Top Higher Bottom’ structure and till this is intact, we expect the stock to attract buying interest on declines. Hence, traders can look to trade with a positive bias and buy the stock on dips in the range of Rs.535-530 for potential targets of Rs.565 and Rs.618 in the near term. One can place a stop loss below Rs.505 on long positions.          
 
GNFC Share Price Target - 

Buy Range – Rs.535 - Rs.530
Stop Loss – Rs.505
Target Price 1 – Rs.565
Target Price 2 - Rs.618
Holding Period – 2 -3 weeks

Disclaimer: The investments discussed or recommended may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and only after consulting such independent advisors as may be necessary.

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About the Author

Ruchit Jain is Lead Research Analyst at 5paisa. He has a vast experience of 14 years in this field and is proficient in Technical and Derivatives Research. He has completed his CMT (U.S.A.) and has done Masters in the field of Finance at Mumbai University.

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