scorecardresearchThese 12 stocks look poised for gains in the short term

These 12 stocks look poised for gains in the short term

Updated: 16 Aug 2022, 12:39 PM IST
TL;DR.

India's economic indicators are shining and the market is reflecting that sentiment. However, concerns persist and now, after the recent gains, the valuations are high.

For the short term, one can consider stocks that look attractive on technical charts.

For the short term, one can consider stocks that look attractive on technical charts.

The market looks upbeat. Retail inflation or the inflation based on the Consumer Price Index (CPI) cooled to a five-month low of 6.71% in July from 7.01% in June. A Mint poll of 28 economists had predicted inflation at 6.78%.

India's factory output, measured by the Index of Industrial Production (IIP), came in at 12.3% for the month of June, compared with 19.6% reported in May. IIP prints shrank but were still above the estimates.

India's economic indicators are shining and the market is reflecting that sentiment. However, concerns persist and now, after the recent gains, the valuations are high.

"The surprise rate cut in China when the rest of the world is hiking rates is an indication of the sharp growth slowdown in China triggered by the widespread Covid lockdowns and woes of the property market. With other BRICS economies like Brazil and South Africa struggling and Russia expected to contract by 9% this year, India stands out with an expected growth rate of 7.2% in FY23. A steady decline in CPI inflation (6.7% in July), Brent Crude falling to $94 and steady buying by FIIs augur well for the markets. However, high valuations are a concern. While remaining invested, investors must exercise caution chasing this rally," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Analysts think one should tread cautiously in this market and bet on quality stocks. For the short term, one can consider 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: Jigar S. Patel, Senior Manager - Equity Research, Anand Rathi Share and Stock Brokers

The stock of PEL has corrected almost 31% from its top of 2,334 which was made on April 8, 2022. From June 1, 2022, to August 10, 2022, it has been consolidating near the crucial support zone of 1,750-1,850.

Recently on a daily scale, the stock confirmed a clean breakout from above mentioned support zone followed by healthy positive volumes and that could be a sign of early reversal.

Power Grid has been trading in the range of 220-225 since last week. In the previous trading session, it gave a clean breakout from its above-mentioned trading range along with rising volume.

In addition, RSI rebounding from 60 levels on the daily chart indicates the possibility of a bounce in the coming sessions.

This stock corrected almost 27% from its top of 1,292 which was made on April 28, 2022. On the weekly chart, it has taken support near its previous historical support zone of 940-950.

For the last one month, it has been making a nice base near 950-960 levels. Recently on a weekly scale, the stock confirmed a 'bullish hammer' 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 an 'impulsive' structure on the RSI weekly scale which is adding more strength to the counter.

Analyst: Sumeet Bagadia, Executive Director, Choice Broking

On the weekly chart, this stock has given a breakout of ascending triangle formation which suggests upside movement in the counter. It has formed a good based around 340 which suggests strength in the counter.

Furthermore, the stock has been trading above the 200-day moving average (MA) which shows a positive trend for the time being.

Daily momentum indicators 'stochastic' and MACD show positive crossover which adds more bullishness to the price.

On the daily chart, this stock has given a breakout of a 'flag' formation which suggests upside movement in the counter.

Additionally, it has bounced from the middle leg of 'Bollinger Band' which suggests a bullish rally will continue further in the near term.

Furthermore, the stock has been trading above 21-day MA which shows a positive trend for the time being. Daily momentum indicator 'stochastic' shows positive crossover which adds more bullishness to the price.

On the weekly chart, it is forming a soccer-type 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 at a 21-day simple moving average, confirming the support in the price action.

The price is above the 'Ichimoku' cloud and positive crossover is indicated in momentum indicators RSI and MACD as well, which suggests 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 81.5. However, on the safer side, near 78-79 levels would be a better range to enter. Closing and sustaining above 84 will lead to 95-96 levels in the coming days," said Bagadia.

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

This stock has been in a gradual uptrend and recently, after a short correction, has maintained its level near the significant 200-day MA and 50EMA (exponential moving average) of 745. It has indicated a bullish candle to improve the bias and a further upside move is anticipated. The RSI also is on the rise and is well placed with immense potential on the upside.

The stock has been in a decent trending mode moving past the significant 200-day MA level of 876 and currently, with a higher bottom formation pattern on the daily chart, has indicated a series of bullish candles to strengthen the bias. The RSI indicator has again regained strength after a short pause and is well placed for a further upside move in the coming days.

The stock, after the recent erosion, has settled down near 770, maintaining a good support zone and has shown signs of improvement with indicators also well placed.

A further move past the significant 50EMA level of 800 would further improvise bias and can anticipate further upward move till 860 target level, keeping the stop loss at 765.

Analyst: Santosh Meena, Head of Research, Swastika Investmart

The overall structure is bullish for this counter where it is witnessing a breakout of bullish flag formation to resume its bullish momentum.

Momentum indicators are also witnessing positive crossover after a period of consolidation. On the downside, the cluster of moving averages in an area of 320-300 will act as an immediate demand zone. On the upside, we can expect an immediate target of 375.

The counter is in strong bullish momentum and now it has witnessed a breakout of bullish flag formation to resuming its momentum.

It is respecting its 20-DMA beautifully which is currently placed at 3,325. On the upside, it is likely to test a psychological level of 4,000 whereas 3,300/3,150 are immediate and strong support levels. Momentum indicators are positively poised to support the current momentum.

The counter has witnessed a breakout of falling wedge formation and it managed to move above its all-important moving averages.

The level of 573 is an immediate hurdle for this counter, above this, we can expect a swift move towards the previous swing high of 635. On the downside, the cluster of moving averages in the 530-520 range will act as a strong demand zone at any pullback.

Momentum indicators RSI and MACD are positively poised to support the breakout.

Disclaimer: The views and recommendations made above are those of individual analysts or broking firms and not of MintGenie.

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First Published: 16 Aug 2022, 11:31 AM IST