The domestic equity market ended marginally higher last week, extending the gains into the fifth consecutive week.
The recent gains of the market have lifted valuations and analysts expect a profit booking in the short term. They point out that the outlook for Nifty is negative for the near term.
"The high low bar of Friday, August 19 has engulfed the previous three candles forming a bearish engulfing pattern. Hence, till the Nifty manages to cross the high of Friday (17,992), the trend will be bearish or sell on rises. On falls, the first support can come in at 17,725," said Deepak Jasani, Head of Retail Research, HDFC Securities.
Clearly, it is time to stay cautious. For the short term, investors can bet on stocks that look attractive on technical charts.
Based on the recommendations of various experts, here are 12 stocks that can give healthy returns in the next 3-4 weeks.
Analyst: Santosh Meena, Head of Research, Swastika Investmart
Astra Microwave Products | Last traded price (LTP) ₹309.15 | Target price: ₹351 | Stop loss: ₹283
The counter is in strong bullish momentum. It has witnessed a breakout of double bottom formation on the weekly chart whereas there is a fresh breakout of bullish flag formation on the daily chart which is creating a fresh expansion phase.
On the upside, ₹351 looks like an imminent target while ₹283 will act as an immediate support level. Momentum indicator RSI is supporting strong bullish momentum whereas MACD is also trading in positive territory.
BEML | LTP: ₹1,825.95 | Target price: ₹2,000 | Stop loss: ₹1,690
The counter is witnessing a breakout of a downsloping channel followed by a large bullish candlestick formation.
On the hourly chart, it is witnessing a breakout of bullish flag formation which may lead to a fresh rally towards ₹2,000. On the downside, ₹1,700 will act as an immediate and strong support level. Momentum indicators look overbought in the short-term period however they may remain overbought for some more time.
Zee Entertainment Enterprises | LTP: ₹260.20 | Target price: ₹300 | Stop loss: ₹245
The counter took support at the upsloping trendline and now it is witnessing a breakout of a bullish inverse head and shoulder formation on the daily chart. It is trading above 20,50,100-DMA (daily moving average), however, 200-DMA of ₹270 will be an immediate hurdle; above this, we can expect a swift move towards the ₹300 level.
On the downside, a cluster of 20 and 100-DMA around ₹245 will act as an immediate support level. Momentum indicators are also supporting the current bullish momentum.
Analyst: Sumeet Bagadia, Executive Director, Choice Broking
Bharti Airtel | LTP: ₹732.35 | Target price: ₹770-775 | Stop loss: ₹710
On the weekly chart, price action settles strong traction above ₹715, confirming bullishness in the stock.
Moreover, it is also forming higher high higher low formation on the daily chart. On the daily chart, the stock is trading above 21 simple moving averages, confirming the support in price action.
The price is trading above 'Ichimoku Cloud' and positive crossover is indicated in RSI and MACD as well which suggests continuity in the bullish trend in the near term.
Sustaining high volume points out buying interest among short-term traders.
"Based on the above technical structure, one can initiate a long position at ₹732. However, on the safer side, near ₹727-730 levels would be a better range to enter. Closing and sustaining above ₹745 will lead towards ₹770-775 levels in the coming days," said Bagadia.
Larsen & Toubro | LTP: ₹1,935.85 | Target price: ₹2,100-2,170 | Stop loss: ₹1,850
On a daily chart, the stock has given a breakout of a horizontal line which suggests upside movement in the counter.
Additionally, the price has bounced from the middle leg of the “Bollinger band” which suggests a bullish rally will continue further in the near term.
Furthermore, the stock has been trading above 21-day moving averages which shows a positive trend for the time being.
A daily momentum indicator 'stochastic' has shown positive crossover which adds more bullishness to the price.
Analyst: Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher
Infosys | LTP: ₹1,597.40 | Target price: ₹1,700 | Stop loss: ₹1,550
The stock has maintained a decent bottom near ₹1,400 after a huge correction and given a pullback to improve the bias.
Currently, after a short dip, it is in the process of making a higher bottom formation pattern and anticipating further rise.
The RSI is in a strong trend and has the potential to rise further in the coming days.
Reliance Infrastructure | LTP: ₹135.45 | Target price: ₹148-150 | Stop loss: ₹128
After making a higher bottom formation pattern, the stock has regained strength to move past the previous peak zone of ₹130 level and has further upside potential to gain till ₹148-150 levels with bias getting improved.
The RSI indicator has regained strength after a short pause and is well placed for further upside in the coming days. "We anticipate for an upside target of 148-150 levels with 128 as the support zone," said Parekh.
Tata Communications | LTP: ₹1,125 | Target price: ₹1,240 | Stop loss: ₹1,070
The stock has indicated a breakout above the downward sloping trendline at ₹1,090 with bias getting even stronger, hinting it can go further upward in the coming days.
The RSI is well placed with strong bias and has the potential to rise further.
Analyst: Jigar S. Patel, Sr. Manager - Equity Research, Anand Rathi Shares & Stock Brokers
HDFC Life Insurance Company | LTP: ₹576.10 | Buying range: ₹574-578 | Target price: ₹650 | Stop loss: ₹538
This stock has corrected almost 26% from its top of ₹775.65 which was made on September 2, 2021.
From March 2, 2022, to August 12, 2022, it has been hovering near the crucial support zone of ₹520-550.
Recently on the weekly scale, the stock made a bullish harami candlestick pattern along with volume picking up exactly near said support zone which is a possible sign of early reversal.
Zee Entertainment Enterprises | LTP: ₹260.20 | Buying range: ₹259-261 | Target price: ₹320 | Stop loss: ₹230
On the daily chart, Zee has been making higher highs and higher lows over the last couple of months. Also, volume is picking up on a daily basis which is complementing its up move.
From the indicator perspective, daily RSI (relative strength index) has taken support from 50 levels and bounced back nicely which further confirms the upside in counter. "One can buy in a small tranche at current levels and buy another tranche at around 250 levels," said Patel.
Jubilant FoodWorks | LTP: ₹596.25 | Buying range: ₹590-595 | Target price: ₹670 | Stop loss: ₹560
On the weekly scale, the stock has taken support near its previous historical support zone of ₹485-525. For the last one month, it has been making a nice base near ₹500-550 levels.
Recently on the weekly scale, the stock confirmed a bullish hammer candlestick pattern exactly at the mentioned historical support and that is adding more confirmation of further upside in the counter.
In addition to the above-discussed technical reasoning, the counter has displayed an 'impulsive' structure on RSI weekly scale which is adding more strength to the said counter.
Analyst: Ravi Gangan, Technical Trader, Mehta Equities
HCL Tech | LTP: ₹969.45 | Target price: ₹1,046-1,105 | Stop loss: ₹945
On the daily and hourly charts, prices are moving in a well-channelized manner, suggesting the uptrend continuing towards the upper trend line of the same channel.
The Relative Strength Index (RSI) is having enough headroom before reaching its overbought conditions.
"Given this favourable scenario, HCL Tech has the capacity of smoothly taking off prices towards ₹1,045 mark, further aggressively towards ₹1,105 levels. Stop loss seems to be at ₹945, as earlier previous price action suggesting that it is this level where the stock has touched multiple times making an ideal Support point," said Gangan.
Tata Steel | LTP: ₹110 | Target price: ₹121-125 | Stop loss: ₹106
The metal stock is sustaining in positive territory of ₹105-114 range. This consolidation will help the stock to shoot up towards higher levels once it breaks out of the upper level of the range. However, with this sideways momentum, it is an ideal time for buying the stock.
Bollinger band is witnessing the expansion/opening of bands on the upside which indicates the positivity for the prices to move towards the upper end of the band.
With this sustainability in the volatile markets, Tata Steel may see the gap filling on the upside towards ₹121/125 levels with the stop loss of ₹106, typically the lower end of the above-mentioned range.
Disclaimer: The views and recommendations made above are those of individual analysts or broking firms and not of MintGenie.