Stocks to buy: The Indian equity market's benchmark index, Nifty 50, rose over 3% last week on rising hopes of political stability and policy continuity following the Indian Lok Sabha elections.Furthermore, the Reserve Bank of India's (RBI) upward revision of its growth forecast for FY25 and subtle signals that the central bank may consider a change in policy stance at its next policy meeting in August also boosted market sentiment.
Related article: RBI Monetary Policy: Possible change in policy in August? RBI to cut interest rates ahead of US Fed?
Experts observed that Nifty 50 has formed a small bearish candlestick with a lower wick on the weekly chart, indicating support at lower levels.
According to Axis Securities, chart patterns suggest that if the Nifty 50 sustains above the 23,400 level, buying will be seen and the index may rise to 23,500-23,800 levels. However, if the index sinks below the 23,000 level, selling will be seen and the index will fall to 22,800-22,600 levels.
“We expect Nifty to trade positively in the range of 23,700-22,600 this week. The daily and weekly strength indicator RSI (relative strength index) is trending up and is above its baseline, indicating a positive trend,” Axis Securities said.
All eyes are on the outcome of the Federal Reserve's meeting this Wednesday. While the medium to long-term outlook for the market remains attractive, macroeconomic data, global developments and possible government policy announcements will likely influence the market in the near term.
Considering the current market structure, experts recommend betting on stocks that are fundamentally and technically sound.
Also read: Value vs Growth Stocks: Which should investors choose amid optimism in Indian stock market? Here's what experts say
Based on the recommendations of multiple experts, here are 9 stocks that have the potential to rise 6-15 percent over the next 3-4 weeks.
Axis Securities
Tech Mahindra | Previous Close: ₹1,377.60 | Buy Range: ₹1,350-1,324 | Target Price: ₹1,505-1,550 | Stop Loss: ₹1,253 | Upside Potential: 13%
On the weekly chart, Tech Mahindra has surpassed the medium-term descending trend line of Rs 1,350 and is showing a strong bullish candlestick, indicating the start of an uptrend.
The daily chart shows a bullish trend with higher highs and higher lows supported by an ascending channel.
It has recently found support at the lower band and is now heading towards the upper band.
The weekly RSI crossed over above the reference line and broke the downward sloping trend line, generating a buy signal.
Related article: From monsoon to rate cut: 5 key catalysts for Indian stock market post 2024 Lok Sabha elections
Raymond | Previous Close: ₹2,471.65 | Buy Range: ₹2,385-2,337 | Target Price: ₹2,713-2,830 | Stop Loss: ₹2,185 | Upside Potential: 15%
Raymond has a positive outlook after observing a breakout above the round bottom pattern at Rs 2,300 on the weekly chart and a strong bullish candlestick breakout.
Volume activity tends to decrease while the pattern is forming, while activity increases upon breakout, indicating increased market participation.
The stock is above the major moving averages of the 20-day, 50-day, 100-day and 200-day periods, indicating an uptrend in both the short and medium term.
The weekly strength indicator RSI is above its baseline, indicating a positive trend.
Related Article: Nifty 50 continues to fluctuate wildly, but how should investors handle this volatility?
Eris Life Sciences | Previous Close: ₹994.45 | Buy Range: ₹980-962 | Target Price: ₹1,065-1,113 | Stop Loss: ₹925 | Upside Potential: 12%
On the weekly chart, Eris has broken above the ₹965-800 consolidation zone with strong bullish candles indicating a continuation of the uptrend.
Trading volume increased during the breakout, indicating an influx of market participants at the breakout level.
The stock found support at the 38% Fib retracement level of the upside from Rs 551 to Rs 972 and settled at Rs 814, identifying a medium-term support base.
The weekly strength indicator RSI crossed over above the Kijun line, generating a buy signal.
Jigar S. Patel, Senior Manager, Equity Research, Anand Rathi Stockbrokers
Kotak Mahindra Bank | Previous Close: ₹1,753.70 | Buy Range: ₹1,730-1,760 | Target Price: ₹1,850 | Stop Loss: ₹1,690 | Upside Potential: 6%
Kotak Mahindra Bank has seen a steep decline of around 380 points, or about 20%, after peaking at around Rs 1,926 on December 18, 2023.
However, Kotak Mahindra Bank showed resilience last week by avoiding further declines and reversing near the lower Bollinger band.
The last trading session saw notable buying activity at the lower price levels, suggesting investors are interested in purchasing the stock at these levels.
From a technical perspective, the monthly Stochastic indicator is indicating a bullish cross, signaling a potential change in momentum and presenting an attractive buying opportunity.
“Traders are advised to consider buying the stock in the range of Rs 1,730 to Rs 1,760 with an expected upside target of Rs 1,850 and a stop loss of Rs 1,690 based on the daily closing price,” Patel said.
UPL | Previous Close: ₹539.75 | Buy Range: ₹525-545 | Target Price: ₹590 | Stop Loss: ₹499 | Upside Potential: 9%
UPL went through a period of consolidation in the range of Rs 505-530 and managed to break out of the bearish trend line that had been in place for about five months.
The stock is stabilizing above this trendline and exhibiting a strong uptrend. From an indicators perspective, the weekly stochastics is exhibiting a bullish cross near the 60 level, indicating a positive sign of potential profits.
“Traders and investors are advised to consider taking long positions in the range of Rs 525-545. The target on the upside is Rs 590 with a stop loss of Rs 499 based on the daily close,” Patel said.
Divi's Laboratories | Previous Close: ₹4,524.05 | Buy Range: ₹4,480-4,530 | Target Price: ₹5,000 | Stop Loss: ₹4,260 | Upside Potential: 11%
This month, Divi's Labs surpassed its previous peak of ₹4,468.
This breakout is significant because it indicates that the stock has overcome a previous resistance level and is now in a position to capture potential profits.
Divi's Labs' ability to sustain price above this range increases the likelihood of continued upward momentum.
From a technical analysis perspective, the weekly Stochastic Oscillator, which helps identify overbought and oversold conditions, reversed direction at the 55 level, indicating a bullish crossover.
This crossover occurs when the short-term stochastic line rises above the longer-term stochastic line, suggesting increasing buying pressure and supporting a bullish outlook.
Shiju Koothupalakkal, Technical Research Analyst, Prabhudas Lilladher
Tata Motors | Previous Close: ₹970.50 | Target Price: ₹1,110 | Stop Loss: ₹917 | Upside Potential: 14%
The stock is showing a breakout of the descending channel above Rs 947.
It has crossed the crucial 50 EMA (exponential moving average) level of Rs 960 and the bias has improved.
The RSI is hovering close to the oversold zone and there is a lot of upside potential from current levels, indicating a trend reversal which could signal buying.
“The stock has been underperforming for a long time but now the chart looks attractive with a good balance between risk and reward, hence I suggest buying the stock keeping the stop loss at Rs 917 and with an upside target of Rs 1,110,” Koothupalakkar said.
Bharat Electronics (BEL) | Previous close: ₹283.20 | Target price: ₹320 | Stop loss: ₹252 | Upside potential: 13%
The stock has maintained a strong overall uptrend on the daily chart.
Recently, the correction from ₹323 gained support near the ₹230 level and showed a decent pullback to improve the bias above the crucial 50 EMA level of ₹248.
The RSI has also settled down from the overbought zone.
It has been gradually declining and is well positioned with significant upside potential if the positive movement continues given current rates.
Larsen & Toubro (L&T) | Previous close: ₹3,532.50 | Target price: ₹3,920 | Stop loss: ₹3,300 | Upside potential: 11%
The stock has recently fallen sharply from a high of Rs 3,919 and is finding support around Rs 3,175.
The stock recovered strongly and crossed the crucial 200 period MA (moving average) level of Rs 3,305, which is witnessing further pullbacks, improving the bias and suggesting an uptrend in the coming days.
The RSI has cooled significantly from the overbought zone and is technically well positioned at current levels, making the chart look attractive again.
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Disclaimer: The views and recommendations expressed above are those of the individual analysts, experts and brokerage firms and not of Mint. You are advised to consult a qualified professional before making any investment decisions.
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