After a flat opening, Nifty50 fell over 100 points within the first hour of trade on February 13, indicating the texture of the market remains weak in the wake of the Adani saga and amid fears of a prolonged phase of rate hikes and economic weakness.
On the technical front, the indicators are giving mixed signals.
Last week, Nifty formed a 'Doji' candle on the weekly chart, indicating indecisiveness among investors and traders.
Brokerage firm Axis Securities observed that the chart pattern suggests that if Nifty crosses and sustains above 18,000, it would witness buying, leading the index towards 18,300-18,500 levels. However, if the index breaks below 17,700, it would see more selling which would take the index towards 17,500-17,300.
At 11:30 am on February 13, the Nifty was at 17,758.10, down 98 points.
"The weekly strength indicator RSI continues to remain flat indicating the absence of strength. However, momentum oscillator Stochastic has turned positive from the oversold zone indicating a possible up move in the near term," said Axis Securities.
Analysts say the market may suffer strong bouts of volatility in the near term due to the prevailing uncertainty. This requires a prudent approach to stock selection.
We collated a list of 12 stocks which brokerage firms and analysts believe can give decent returns in the short term. Take a look:
Brokerage firm: Axis Securities
ABB, on the weekly chart, has decisively broken out above the “falling channel” with a strong bullish candle. The stock is holding above 50 percent Fibonacci retracement of a rally from ₹1,944 to ₹3,433 which is placed at ₹2,687, forming a medium-term support zone.
The weekly strength indicator RSI is in bullish mode and the weekly RSI crossover above its reference line generates a buy signal.
"The stock has been forming a higher high-low on the weekly chart which indicates a positive uptrend. The above analysis indicates an upside of ₹3,330 - 3,450 levels," said the brokerage firm.
Gujarat Fluorochemicals | Buying range: ₹2,930-2,872 | Expected upside range: ₹3,310 - 3,385 | Stop loss: ₹2,695
On the weekly chart, Gujarat Fluorochemicals have decisively broken out above the “falling channel” formation, indicating positive bias.
The breakout is accompanied by an increase in volume confirming participation at the breakout level.
The stock is holding above the medium-term horizontal support zone around ₹2,400, which will act as a medium-term support zone.
The weekly strength indicator RSI is in bullish mode and the weekly RSI crossover above its reference line generated a buy signal
"The above analysis indicates an upside of ₹3,310 - 3,385 levels," said the brokerage firm.
Carborundum Universal | Buying range: ₹985-967 | Expected upside range: ₹1,075 -1,120 | Stop loss: ₹925
On the weekly chart, Carborundum Universal has decisively broken out above the “cup and handle” pattern above ₹960.
In the week gone by, the stock retested a breakout area and closed above the previous week's breakout candle, indicating positive bias.
The breakout is accompanied by an increase in volume, confirming participation at the breakout level.
The weekly strength indicator RSI is holding above the 50 mark and also above its reference line which indicates positive momentum in the stock.
"The above analysis indicates an upside of ₹1,075 -1,120 levels," said the analyst.
Analyst: Sumeet Bagadia, Executive director, Choice Broking
On the weekly chart, the stock has formed a base around ₹258-260 level. Also on the daily chart, the stock is sustaining above 20 and 50 DMA which suggests bullishness in the counter.
A double bottom pattern can be seen simultaneously, indicating the stock is getting ready for a respectable uptrend.
"We anticipate volume participants will also support price action once in the coming days. The stock is trading above Ichimoku Cloud and RSI and MACD are indicating positive crossovers," said the analyst.
"One can initiate a long position at the current market price or near ₹270 for the target of ₹288-292. Stop loss can be kept at ₹258," said the analyst.
TVS Motors is currently trading at ₹1,075 and is trending upward while maintaining trendline support.
For the past five months, TVS has been witnessing good price and time consolidation. It is currently fluctuating between ₹975 and ₹1,175.
In comparison to the benchmark index, TVS Motors has been making higher lows for the past week and is displaying relative strength.
The stock has recently broken out of its short-term moving averages and is trading above all moving averages at this time.
The RSI has exhibited a positive crossing and is currently quoting around 60, indicating that there is still a possibility for a rally for the stock.
"We suggest buying TVS Motors stock around ₹1,075 and adding till ₹1,035 with a target of ₹1,170–1,210. Below ₹1,005, our view will be negated," said the analyst.
MCX retested a crucial support level of ₹1,370 after it had corrected from the level of ₹1,640. The stock's nearest point of resistance is at ₹1,445.
It may continue to increase towards the levels between ₹1,480 and ₹1,500 after it passes the highlighted barrier.
Positive divergence is visible on the RSI indicator at a level of 38, which supports the stock's upward movement.
The stock created a Dragonfly Doji pattern at the support levels, which is a sign of reversal.
"We recommend buying MCX stock at the current market price. It can also be accumulated near ₹1,410 with a medium-term target price of ₹1,480. If it closes below ₹1,385, our analysis will be considered invalid," said the analyst.
Analyst: Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher
The stock has witnessed a decent erosion from ₹3,580. It is currently making a low near ₹2,700 which is the major support of the long-term trendline zone.
A pullback indication has improved the bias and a further rise is anticipated in the coming days. The RSI is well-placed and has shown a trend reversal from the highly oversold zone, indicating strength.
"With the chart looking attractive, we suggest buying and accumulating the stock for the upside targets of ₹3,270 and ₹5,100 with support remaining strong near ₹2,700 zone," said the analyst.
After the consolidation phase, the stock has given a breakout from the rangebound zone with a positive bullish candle pattern on the daily chart, implying strength.
The RSI indicator is well-placed, gradually on the rise, indicating strength. It has immense upside potential.
After a short correction, the stock showed a decent pullback, indicating a higher bottom formation pattern on the daily chart with an improvement in bias.
The RSI has indicated a rise, showing strength and is well-placed with an upside potential visible to carry on with the momentum further.
Analyst: Jigar S. Patel, Senior Manager - Equity Research, Anand Rathi Share and Stock Brokers
The free fall, which started in November 2022 and continued till January 2023, got arrested around ₹46-48 levels. Moreover, the entire free fall accounted for a 40% cut in price.
Recently, this counter has formed a bullish shark structure on a daily scale along with bullish divergence seen on RSI (relative strength index) and MACD (moving average convergence divergence) histogram which is looking lucrative.
"One buy in a small tranche around ₹53-54 and another around ₹51-52. The upside is expected till ₹62, with a stop-loss at ₹48 on a daily close basis," said the analyst.
Since last year, Nykaa has been making lower high and lower low structures, resulting in a 71 percent cut in stock price.
At extreme levels, it has reversed from its crucial support zone of ₹120-125, which is also a 1.618 (one of the extreme ratios among harmonic arsenal) extension of its previous April 2022 swing high.
On the indicators' front, a bullish divergence is seen on the daily RSI along with MACD bullish cross which hints towards an early reversal.
A rally from November 2022 to January 2023 resulted in a whopping return of 40 percent.
Since February 2023, it has been giving a correction which got arrested near 0.618 retracements of the November 2022 rally.
At the current juncture, it has made multiple Doji structures exactly at 0.618 level which hints towards an early reversal in the counter.
On the indicators' front, the daily RSI has rebounded from 35 levels along with the MACD histogram losing downside momentum which echoes towards the upside in the counter.
Disclaimer: The views and recommendations given in this article are those of individual analysts and broking firms. These do not represent the views of MintGenie.