Intraday Trading Strategy and Stock Picks for January 22, 2021

As a dedicated pattern breakout trader, my strategies and picks are based on well-defined criteria. This article provides my analysis of stocks for intraday trading on January 22, 2021. It is important to remember that this information is not for buy/sell recommendations, and you should always consult your financial advisor before making any trading decisions.

TECH MAHINDRA (TECHM)

The stock TECHM has formed a head and shoulders pattern on a 1-hour chart. If the Nifty IT sector underperforms in the upcoming trading session, a breakout is anticipated. Based on the chart, if the stock closes below 983, a potential support level may be at 975. It is crucial to closely monitor the price action as it approaches these levels before taking any trading decisions.

HCL TECHNOLOGIES (HCLTECH)

HCLTECH has created a pennant pattern, indicating a potential breakout in either direction based on the overall performance of the Nifty IT sector and the wider market. For detailed analysis on stocks, you can follow STOCKPICKERZONE, a free channel for in-depth stock analysis.

Founded on Breakout Patterns

This article focuses on stocks that have met specific criteria for breakout trades. Here’s a closer look at two stocks:

Tech Mahindra (TECHM)

TECHM’s 30-minute chart indicates that the stock has cleared five essential checkpoints, making it a strong candidate for a buy entry. Key factors include:

The stock is in a channel or rising wedge pattern. The resistance breakout candle has a body more than 50% on the breakout end. The risk-to-reward ratio is 1:4, a favorable ratio for traders. There has been no retest or last-kiss break of the last support zone.

Buy at: CMP (Closing Market Price)
Stop-Loss: Rs 3250
Target: Rs 3320

Asian Paints

Asian Paints is currently on my watchlist as it still needs to tick off two criteria from my checklist.

The stock has yet to revert from an important support zone (Unchecked). It has taken support from the old zone and bounced back (Checked). The risk-to-reward ratio is more than 1:3, making it a preferred trade (Checked). A retest/last-kiss of the marked zone has yet to occur (Unchecked).

Sell at: Rs 2742 only if it gives a bearish candle.
Stop-Loss: Rs 2773
Target: Rs 2655

Disclaimer: I am not a SEBI registered trader or advisor. Please do your own analysis before executing any trades. Feel free to post any doubts in the comments section, and I will be more than happy to discuss or clear them.

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