scorecardresearchMarket sees consolidation with RBI MPC outcome in focus; analysts recommend

Market sees consolidation with RBI MPC outcome in focus; analysts recommend these 11 stocks to buy for the short term

Updated: 05 Dec 2022, 12:50 PM IST

On the technical front, it looks tough for the Nifty to breach 19,000 on the upside since it is a crucial resistance for the index.

The market is expected to remain volatile in the short term.

The market is expected to remain volatile in the short term.

Indian equity market benchmark Sensex opened flat and traded lower for the most part for the session on December 5.

After the recent gains, the market was expected to see some consolidation. Now the focus is on the RBI MPC outcome on December 7.

It looks tough for the Nifty to breach 19,000 on the upside on the technical front since it is a crucial resistance for the index.

"18,888 and 19,000 are immediate resistance levels for the Nifty, and then 19,300 will be the next target level. On the downside, 18,600–18,550 is an immediate demand zone, while 18,440 is the next important support level," said Santosh Meena, Head of Research, Swastika Investmart.

The market is expected to remain volatile in the short term, reacting to macroeconomic prints and global cues. Trading in this market may be tough for new investors and analysts advise them to bet on stocks that look good on technical charts and have sound fundamentals.

Based on the recommendations of several analysts, here are 11 stocks that one can buy for the short term.

Analyst: Jigar S. Patel, Senior Manager - Equity Research, Anand Rathi Share and Stock Brokers

The counter observed a free fall from 6,175 to 4,070 and has stabilized near its historical support of 4,300.

During the third week of November 2022, it made a perfect hammer candlesticks pattern near the support of 4,300, followed by a solid breakout of its previous swing high of 4,550, thus confirming its further upside.

From the indicator perspective, the weekly RSI (relative strength index) has rebounded from 50 levels along with the weekly directional movement index displaying a strong upside.

"One can buy in a small tranche at current levels and buy another tranche at around 4,500," said the analyst.

Gujarat Gas has corrected almost 49 percent from its top of 780 which was registered on August 2, 2021.

On a weekly scale, it has taken support near 470-480 levels. Recently on a weekly scale, the stock confirmed a bullish piercing line candlestick pattern followed by a bullish engulfing pattern exactly at the mentioned support levels and that is adding more confirmation of further upside in the counter.

In addition, weekly RSI has displayed an impulsive structure near the oversold zone which is adding more strength to the said counter.

This stock has corrected almost 48 percent from its top of 1,754 which was made on December 27, 2021.

From June 15, 2022, to September 15, 2022, it had been consolidated near the crucial support zone of 950-1000.

Recently, the stock confirmed a couple of Dojis, followed by hammers at the mentioned support zone which could be an early sign of early reversal.

From the Indicator perspective, the weekly RSI (relative strength index) has displayed an impulsive structure near the oversold zone along with the weekly Directional movement index displaying a strong upside.

"One can buy in a small tranche at the current levels and buy another tranche at around 1,000 level," said the analyst.

Analyst: Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher

The stock, after a short consolidation period, has given a breakout above the 460 level with a positive bullish candle pattern on the daily chart.

The RSI has shown a significant improvement in its trend and is well placed with immense upside potential visible.

The stock has been in a consolidation period for quite some time and has given a breakout above the 1,385 level with the trend improving and getting stronger.

The RSI is also well placed with strength indicated and has the potential to rise further ahead.

"The chart has become quite attractive and the stock is anticipated to rise with an overall positive bias. We suggest buying and accumulating the stock for an upside target of 1,570, keeping the stop loss of 1,370," said the analyst.

The stock has witnessed a value erosion in recent times and has been in the consolidation phase for quite some time near 805.

The RSI has indicated a trend reversal from the highly oversold zone and is well-placed with the strength indicated.

Analyst: Sumeet Bagadia, Executive Director, Choice Broking

For roughly three weeks, Astral has been observing a tight consolidation in its demand zone, which is centred between 1,875 and 1,820. These are particularly important levels for Astral since they were respected when the stock was weak.

Astral has currently broken free of trendline resistance and is trading above its 20-day EMA (exponential moving average).

Astral will face mild resistance around 2,025 due to the placement of mid and long-term moving averages. There is a strong RSI crossover, indicating that momentum is building.

Astral has witnessed a reasonable price and volume breakout, with today's volume being four times the normal 20-day volume and the price moving over 4 percent.

"We propose purchasing Astral at 2,018. However, the stock may encounter some resistance at 2,025, but once overcome, we may expect it to move to 2,155-2,200 in the medium term," said the analyst.

Tech Mahindra has lately had an ascending triangle break out at 1,075. This breakout was accompanied by a heavy volume.

The stock was confronting resistance around 1,075 to 1,085 levels which it was able to break with large volumes.

It is trading above its 20-day, 50-day, and 100-day moving averages, but is below its 200-day EMA, which is set at 1,140.

The RSI is currently trading at 66, indicating momentum. The ADX, or strength indicator, is at 30. The orientation of the ADX line is significant for determining trend strength. When the ADX line rises, trend strength rises, and the price moves in the direction of the trend.

United Spirits has been moving in a positive rising channel for the last few months. It has been maintaining its position above all short-term, mid-term, and long-term exponential moving averages, particularly the 20, 50, 100, and 200-day EMAs.

The RSI has provided a bullish crossover, indicating that the bulls have taken control of the momentum.

"The stock has given a trendline breakout at 918 on the weekly chart, and we expect that this momentum will continue. Bollinger bands are currently expanding, indicating that volatility has increased and bulls have taken control following a short squeeze in the stock in recent days," said the analyst.

Analyst: Pravesh Gour, Senior Technical Analyst, Swastika Investmart

With massive volume, the counter is breaking out of a long consolidation and resuming its traditional uptrend. It has also broken out above 190 for the first time in a long time.

It is respecting its 9, 20-SMA beautifully, which are currently placed at 170. Most of the momentum indicators are positively poised and indicate further rallying in this counter.

The counter has witnessed a breakout of a bullish inverse head and shoulder formation with strong volume. The overall structure of the counter is very classical on the daily chart.

The pattern suggests an immediate target of 244, while it has the potential to move further upside to 254.

On the downside, a breakout level of 205 will serve as a strong base, while the 200-day moving average will serve as a strong support level.

The momentum indicator RSI (relative strength index) is also positively poised, whereas MACD (moving average convergence divergence) is supporting the current strength.

The counter is in a strong uptrend where it is breaking out of flag formation. It created a strong base around their breakout level at 260, however, 300 is an immediate resistance where it may see some pause but above this, it is likely to head towards 324 levels.

On the downside, at any correction, 260 is major support, while 250 is the next critical demand level. MACD and RSI are supporting the strength of the current movement.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.

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First Published: 05 Dec 2022, 12:24 PM IST