The domestic equity market has been on a downward spiral in the last couple of months amid concerns over inflation, rate hikes, global economic slowdown, the Adani-Hindenburg saga and the banking crisis in the US and Europe.
Equity benchmark the Sensex is down about 10 percent from its all-time high of 63,583.07 that it hit on December 1 last year.
The market is expected to remain volatile in the short term as investors remain worried over the health of banks even though analysts and experts say it is unlikely that the current banking crisis will be a repeat of the 2008 global financial crisis.
A piece of positive news for the market is that the Fed has hinted at the possibility of a pause in the rate hikes. Moreover, media reports are suggesting that US authorities are considering the expansion of an emergency lending facility that would offer banks more support.
Analysts say one should avoid timing the market and bet on quality stocks to maximise gains and minimise losses.
Analysts recommend betting on these eight stocks for the short term as they look sound on technical indicators.
Recommendations of Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher
Apollo Hospitals Enterprises | Target price: ₹4,700 | Stop loss: ₹4,200
The stock recently witnessed a gradual erosion from ₹4,670 level and flattened out, indicating improvement with a positive bullish candle pattern on the daily chart moving past the important 200DMA (daily moving average) level of ₹4,320.
The RSI has indicated a trend reversal to signal a ‘buy’ and is well-placed with much upside potential from here on.
"With the chart looking very attractive, we recommend a buy in this stock for an upside target of ₹4,700 keeping a support level of ₹4,200," said the analyst.
Hindustan Aeronautics (HAL) | Target price: ₹2,900 | Stop loss: ₹2,460
The stock has witnessed a temporary dip to hit the low of ₹2,470 which is a good opportunity to make a fresh entry.
It has indicated a decent pullback with significant volume participation once again, improving the bias with much upside strength.
The RSI indicator also is well-placed and a trend reversal has indicated a ‘buy’ with upside potential from here on.
"With the chart looking good, we recommend buying this stock with an upside target of ₹2,900 and a stop loss of ₹2,460," said the analyst.
Mahindra CIE Automotive | Target price: ₹410 | Stop loss: ₹342
The stock has witnessed a decent correction after making the peak level of ₹462 and has retraced almost 38.20 percent.
It has been in consolidation near ₹345 and has indicated a positive candle with improving bias.
The chart looks very attractive and the RSI is also improving from the oversold zone. "We recommend buying this stock with an upside target of ₹410 and a stop loss of ₹342," said the analyst.
Recommendations of Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers
HDFC Life Insurance Company | Buying range: ₹490-495 | Target price: ₹535 | Stop loss: ₹475
The stock registered a top of ₹620 on January 6 and has been making the lower top and lower bottom structures since then, which resulted in a 26 percent cut in price.
In February 2023, it made a nice base near ₹460-470 levels.
"On the indicator front, daily RSI (relative strength index) has displayed a bullish regular divergence along with MACD (moving average convergence divergence) bullish crossover, further confirming our bullish view on the counter," said the analyst.
"One can buy in a small tranche in the range of ₹490-495 and another around ₹480-485 for an upside target of ₹535 and a stop loss of ₹475 on a daily close basis," added the analyst.
Cipla | Buying range: ₹870-880 | Target price: ₹950 | Stop loss: ₹840
In the last six months, this stock has seen massive beating resulting in a 28 percent cut in price. It looks like the fall is arrested around ₹860-870 levels.
On a daily scale, Cipla has made the bullish alternate Bat pattern which is one of the most powerful patterns in the Harmonic arsenal.
The potential reversal zone comes around ₹860-870, which is complemented by pair of hammer structures thus making it lucrative at current levels.
"One can buy in the range of ₹870-880 with an upside target of ₹950 and with a stop loss of ₹840 on a daily close basis," said the analyst.
Great Eastern Shipping Co. | Buying range: 620-630 | Target price: ₹680 | Stop loss: ₹585
The stock registered a top of ₹749 on December 21, 2022. Since then, it has been making the lower top and lower bottom structures which resulted in a 29 percent cut in price.
During February 2023, it made a nice base near ₹560-580 levels. On a daily scale, a bullish engulfing candlestick pattern was seen near mentioned support zone of ₹580 level, thus confirming a bullish stance for coming sessions.
In the previous sessions, there was a huge buying interest along with massive volume which is a sign of further upside in the counter.
"On the indicator front, the daily RSI (relative strength index) has displayed a bullish regular divergence along with MACD (moving average convergence divergence) bullish crossover further confirming our bullish view on the counter," said the analyst.
"One can buy in a small tranche in the range of ₹620-630 and another around ₹605-610 for an upside target of ₹680 and stop loss of ₹585 on a daily close basis," added the analyst.
Sumeet Bagadia, Executive Director at Choice Broking
Godrej Consumer Products | Target price: ₹985-990 | Stop loss: ₹930
Godrej Consumer Products, a well-established FMCG company, is currently trading near ₹951 and based on technical analysis, it appears to be performing well.
The stock price is above its short-term, mid-term, and long-term averages, and it's also holding above the support level of ₹950.
If the stock price manages to break above the ₹960 level, there is a good chance of seeing a rally up to ₹985-990 in a short period of time.
The RSI, which is currently at 58, indicates that the stock is not overbought or oversold, and there is more room for expansion.
The RSI is a momentum oscillator that measures the speed and change of price movements. An RSI value of 58 suggests that the stock has room to move higher before it becomes overbought.
Additionally, the Bollinger bands are showing an expansion, which suggests an increase in volatility. The expanding Bollinger bands suggest that there is potential for significant price movement in the near term.
"However, if the stock price falls below ₹930, the bullish view may no longer hold true. Investors are advised to keep a close watch on the stock price and market developments before making any investment decisions," said the analyst.
Tata Communications | Target price: ₹1,285 | Stop loss: ₹1,175
Tata Communications has strong support near ₹1,160 level, and the stock has not closed below that level in the last four weeks, indicating strength.
For the last three days, the stock has been facing resistance at ₹1,220 level which is also a 200-day EMA (exponential moving average).
The stock has broken through resistance and closed at ₹1,223, indicating bullishness. Minor resistance is located at ₹1,230 level, which is also a 50-day EMA level, and a close above ₹1,230 level will help the stock in moving upwards towards ₹1,285 level.
"With a medium-term target price of ₹1,285, we advise buying Tata Communications at the current market price of ₹1,223. Tata Communications can also be accumulated near ₹1,200 level. If the price closes below ₹1,175, our analysis will be considered as being invalid," said the analyst.
Cipla | Target price: ₹930-940 | Stop loss: ₹845
On the weekly chart, the stock has formed a Doji pattern indicating a short-term reversal. Additionally, the pharma sector has shown some momentum in the past few days as well.
In a larger time frame, Cipla had a strong base of around ₹850. The Bollinger band, on the daily period, has begun to widen, indicating short-term buy interest.
"Based on the above technical structure one can initiate a long position at the current market price of ₹877. However, on the safer side, near ₹870 level would be a better range to enter. Closing and sustaining above ₹885 will lead towards ₹930-940 levels in the coming days. Stop loss can be kept at ₹845," said the analyst.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.