The market did not feel surprised by a 50 bps hike by the RBI as it closed the week on a positive note. For the week, Sensex and Nifty closed 1.4% higher each while the mid and smallcap indices settled with gains of 2% each.
The rate hike is done and now the market will shift focus again to quarterly earnings, macroeconomic prints and global cues. Inflation numbers of the US, China and India will be in focus.
On the technical front, Apurva Sheth, Head of Market Perspectives, Samco Securities pointed out that after a remarkable comeback from the bottom of the 15,200 in June, it appears like the bulls are running out of steam.
"On the hourly charts, the Nifty is forming a bearish divergence with the RSI, indicating that the upward momentum is slowing. Throughout last week, the index encountered resistance around 17,500. This level is expected to act as a resistance in the next week too. On the downside, 17,000 is anticipated to provide significant support for the index," said Sheth.
For the short term, analysts advise investors should focus on stocks that look attractive on technical charts. Based on the recommendations of various experts, here are 10 stocks that can give healthy returns in the next 3-4 weeks.
Analyst: Jigar S. Patel, Sr. Manager - Equity Research, Anand Rathi share and stock brokers
From June 20, 2022, to July 31, 2022, the stock has been consolidating near the crucial support zone of ₹100-108.
Recently on the weekly scale, the stock confirmed a bullish 'Harami' candlestick pattern exactly at the mentioned support followed by healthy positive volumes and that could be a sign of early reversal.
Besides, the counter has confirmed a breakout from the trading range of ₹100-110 and has closed near ₹111.
Muthoot Finance seems to be oversold and we are witnessing a positive crossover in MACD on the daily scale along with RSI rebounding from 45 levels on the daily chart.
This indicates the possibility of a bounce in the coming sessions. In addition, the stock has broken its previous swing high of ₹1,092 on the daily scale.
For the last few sessions, the counter has broken the upper side of the trendline and recently it confirmed a breakout from this trend line on a closing basis.
On the weekly chart, the stock has taken support near its previous historical support zone of ₹400-410.
For the last one month, it has been making a nice base near ₹420. Recently on the weekly scale, the stock confirmed a bullish 'Harami' candlestick pattern exactly at the mentioned historical support and that could be a sign of early reversal.
In addition to the above-discussed technical reasoning, the counter has displayed a complex structure on RSI weekly scale which is adding more strength to the said counter.
Analyst: Sumeet Bagadia, Executive Director, Choice Broking
On the weekly chart, the stock has confirmed the bullish 'Harami' candlestick pattern, suggesting upside movement in the counter.
The stock has formed a good based around ₹400 which suggests strength in the counter.
Furthermore, it has been trading above 21-day moving averages (DMA) which shows a positive trend for the time being.
Daily momentum indicators stochastic and MACD have shown positive crossover which adds more bullishness to the price.
On the weekly timeframe, this stock has been moving in higher high –higher low formation for the last three weeks, suggesting a bullish trend which may continue.
This stock has been sustaining above the horizontal line as well as supper trend which adds strength to the counter.
Furthermore, the stock has been trading above the 21-day moving average which shows a positive trend for the time being.
Daily momentum indicator MACD has shown positive crossover which adds more bullishness to the price.
On the monthly chart, the stock has formed a bullish engulfing pattern, 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 the 21-simple moving average, confirming the support in price action.
The price is trading above ‘Ichimoku Cloud’ and positive crossover is indicated in RSI and MACD in the momentum indicator as well that is suggesting continuity in the bullish trend in the near term. Sustaining high volume points out buying interest among the traders.
"Based on the above technical structure one can initiate a long position at CMP ₹838. However, on the safer side, nearby ₹825 would be a better range to enter. Closing and sustaining above ₹850 will lead to ₹880-885 levels in the coming days. Stop loss can be kept at ₹805," said the analyst.
Analyst: Santosh Meena, Head of Research, Swastika Investmart
This counter is gaining strong bullish momentum followed by a breakout of the bullish cup and handle formation.
On the upside, ₹1,120 is an immediate hurdle; above this, we can expect a move towards a 200-DMA of ₹1180.
On the downside, ₹1,060 is an immediate support level while ₹1,030 is a sacrosanct support level. Momentum indicators are supporting the current breakout in this counter.
The counter is in strong bullish momentum and it is breaking out the key hurdle of ₹71 that may lead this counter to ₹89 while ₹80 is an intermediate hurdle.
It is respecting a cluster of moving averages with a positive bias in momentum indicators. It has witnessed a closing above March 2020 level that may lead to a fresh expansion phase.
The counter has witnessed a breakout of falling wedge formation where it respected the cluster of 20 and 100-DMA and managed to close above its 200-DMA with bullish candlestick formation.
We can expect a swift move towards the ₹138 level while the downside is protected with a ₹118-115 support zone, said the analyst. MACD is trading above the centerline while RSI is positively poised above the 60 mark.
Analyst: Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher
The stock has picked up well from the bottom made near ₹304 and is currently in a strong trend with near-term support maintained near the ₹370 level and the price rate maintained above the significant 50EMA level of ₹375.
The RSI is on the rise getting stronger and stronger and has further upside potential from the current rate.
"With the chart looking attractive and with a strong bias maintained, we suggest buying and accumulating this stock for an upside target of ₹435 keeping the stop loss at ₹370," said the analyst.
The stock has been in a strong trend from the low made near ₹1,456 and has crossed the significant 200DMA of ₹1,765 to suggest further strength.
Currently, after a short dip, the stock has indicated improvement and further upside is anticipated in the coming days.
The RSI is in a strong trend and has the potential to rise further in the coming days.
"With the chart looking attractive, we suggest buying and accumulating this stock for an upside target of ₹1,960 keeping the stop loss of ₹1,720," said the analyst.
The stock has witnessed a decent pullback from the support zone of ₹670 and moving above the significant 50EMA level of ₹768 has shown prominent strength with upside movement anticipated in the coming days.
The RSI has indicated a reversal from the oversold zone and is on the rise with immense potential on the upside.
Disclaimer: The views and recommendations made above are those of individual analysts or broking firms and not of MintGenie.
