NEW DELHI: After opening some 100 points higher, domestic equity benchmark Sensex slipped into the negative territory within the first hour of trade on Monday.
A surge in crude oil prices on worries over heightened tensions between the US and Iran, subdued rupee and uncertainty ahead of the Union Budget made investors to turn risk averse. The rupee opened 3 paise down at 69.61 against the US dollar on Monday.
Sluggish progress of monsoon is also a concern; 84 per cent of the meteorological subdivisions have recorded deficient rainfall so far, MeT department data showed.
Mixed trading in other Asian markets amid hopes of thaw in Sino-US trade tensions failed to boost sentiment. The US President and his Chinese counterpart are scheduled to meet on the sidelines of the G20 summit and discuss the trade dispute later this week. Analysts advised caution. A stock-specific approach in such an unstable market can help maximise gains and minimise losses, they said.
Based on the recommendations of various analysts and brokerages, here is a list of 9 stocks that they say can potentially deliver gains over the next 2-3 weeks.
Subash Gangadharan, Senior Technical Analyst, HDFC securities
Timken India | Buy | Target price: Rs 790 | Stop loss: Rs 655
Timken has shown a lot of relative strength of late. The stock has broken out of the Rs 500-625 range a few weeks back on above average volumes. This shows significant accumulation has happened on this counter and it augurs well for the uptrend to continue. While the stock has consolidated for the past few weeks after the recent breakout, it has bounced back strongly from the low of Rs 652 this week. The stock has moved above its 13-day SMA. The 14-day RSI, too, has turned up and cut its nine-day EMA from below. “Technical indicators for the intermediate term are giving positive signals. Buy this stock between Rs 680 and Rs 699 levels with a stop loss at Rs 655 and a price target of Rs 790,” said Gangadharan.
Godrej Industries | Buy | Target price: Rs 525 | Stop loss: Rs 445
Godrej Industries has bounced back strongly this week from the low of Rs 443, thereby forming a double bottom. The stock previously tested these levels in the middle of May, 2019. Technical indicators are giving positive signals, as the stock trades almost above the 13-day SMA. The 14-day RSI has turned up and cut its nine-day EMA from below. The MACD, too, has turned up and is now on the verge of cutting its moving average.
Rajesh Bhosale, Technical Analyst, Angel Broking
UltraTech CementNSE 0.03 % | Buy | Target price: Rs 4,890 | Stop loss: Rs 4,425
This stock had seen a bullish breakout in April after breaking out of the Rs 4,500 level, which acted as a stiff resistance for four times in the last two years. After the breakout, the stock witnessed a sharp bounce towards the Rs 4,900 level. However, in last few weeks prices have retraced back to the breakout levels, a natural tendency in price movement before achieving bigger targets.
On the weekly chart, prices seem to have resumed the primary uptrend by forming a bullish reversal pattern in the breakout zone. Volume analysis indicated high volume during the bounce, whereas comparatively low volumes during a downturn suggested accumulation on the counter. After forming a base around 40, momentum oscillator RSI gave a fresh buy signal with its smoothened average supporting a bullish view.
Dr Lal Path Labs | Buy | Target price: Rs 1,310 | Stop loss: Rs 1,065
After consolidating for last six months, this stock has broken above the higher range of consolidation, confirming a bullish pattern breakout, known as ‘Cup N Handle’. Momentum oscillator RSI has broken above the 60 range, which acted as a stiff hurdle four times in last three months. In addition, prices are well above major moving averages such as 20, 50, 200 days, which indicate overall bullishness on the counter.
Vikas Jain, Senior Research Analyst, Reliance Securities
Ambuja CementsNSE 1.95 % | Buy | Target price: Rs 236 | Stop loss: Rs 201
This stock has found multiple supports around Rs 200 level after witnessing a sharp drop from Rs 245 mark over the past one year. A positive crossover in RSI and rise in Stochastic from its oversold zone indicate a probable turnaround in the stock. “As per the current daily set-up, the stock may keep moving higher and revisit previous highs. Fresh long positions can be initiated in the stock for a target of Rs 236 with a stop loss of Rs 201,” said Jain.
Bank of Baroda | Buy | Target price: Rs 135 | Stop loss: Rs 110
This stock reversed from its lifetime high and later took multiple supports near its long-term 200-day moving average. Due to a rebound in the stock, key technical indicators-RSI and MACD have breached their bearish divergence trend. “As per the current set-up and positive momentum in the sector, we believe the stock will bounce at least 50 per cent of the entire fall from current levels,” Jain said.
Vaishali Parekh, Senior Technical Analyst at Prabhudas Lilladher
Engineers India | Buy | Target price: Rs 130 | Stop loss: Rs 111
This stock has made a higher bottom formation on the daily chart, taking support near Rs 111 level. It has bounced back with a positive candle to move past the significant 200-DMA and has implied strength and potential to rise further in the coming days. The RSI has also indicated a trend reversal to improve the bias and has given a buy signal. “With good volume participation witnessed, we recommend a buy in this stock for an upside target of Rs 130, keeping a stop loss of Rs 111,” said Parekh.
State Bank of India (SBI) | Buy | Target price: Rs 375 | Stop loss: Rs 333
This stock has maintained a good support near the Rs 334 level and has been consolidating for some time. “It currently has indicated a positive candle with improving bias and we anticipate a further move in the upward direction in the coming days,” Parekh said. The indicators have become favourable, with the RSI also indicating a trend reversal has given a buy signal.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
SRF | Buy | Target price: Rs 3,241 | Stop loss: Rs 2,848
This counter appears to be having a better relative strength when compared to Nifty. While Nifty has been falling for the last three weeks, this stock not only stabilised but went on to register new life-time highs. “As the trend across the timeframes is strong, positional traders are advised to adopt a two-pronged strategy of buying now and on dips, preferably around Rs 2,900 and look for a bigger target of Rs 3,241,” said Mohammad.
UltraTech Cement | Buy | Target price: 4,790 | Stop loss: Rs 4,420
This counter appears to have formed a decent base around Rs 4,425 from where a decent pullback move can be expected. However, as the right technical stop is looking slightly far away, positional traders will be better off by buying now and on declines, especially in the zone of Rs 4,510–4,470 and look for a target of Rs 4,790, with a stop loss Rs 4,420 levels, said Mohammad.