NEW DELHI: Domestic equity benchmarks opened in the red on Tuesday, mirroring bearish sentiment in major Asian markets.
A lacklustre Chinese manufacturing data spooked investor sentiment, adding to the cautiousness as participants awaited the US Fed’s policy decision for clues on the US economy and the US central bank’s future rate trajectory.
A slight drop in crude oil prices and the rupee’s rise against the dollar capped further downside in the market.
Election-related jitters, March quarter earnings and foreign fund flows were other key factors swaying the market on either side.
Analysts are advising a prudent, stock-specific approach at this juncture. Based on various brokerage recommendations, here is a list of 11 stocks that analysts say can potentially deliver solid gains over the next 2-3 weeks.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
HCL Technologies | Buy | Target price: Rs 1,270 | Stop loss: Rs 1,090
Long-term charts on the counter are looking interesting. The stock has witnessed a breakout this month to register new life-time highs after almost a year of struggle in the Rs 1,100–900 range. This range breakout itself is projecting a target around Rs 1,300. Going forward, sustaining above Rs 1,100 would be crucial for this stock to retain the positive momentum. “Positional traders, at this juncture, can adopt a two-pronged strategy of buying now and on declines close to Rs 1,100 and look for a target of Rs 1,270 with a stop loss at Rs 1,090,” said Mohammad.
Jindal Steel and PowerNSE 1.68 % | Buy | Target price: Rs 190 | Stop loss: Rs 167
This counter recoiled on relatively higher volumes from its support level of Rs 165, hinting at a near-term bottom around this level. Sustaining above Rs 168, it can test its recent swing high placed around Rs 191. “Positional traders should buy this stock by adopting a two-pronged strategy of buying now and on declines around Rs 170, and look for a target of Rs 190 with a stop loss of Rs 167,” Mohammad said.
Aditya Agarwala, Senior Manager, Technical Analysis, YES Securities
State Bank of India | Buy | Target price: Rs 340-360 | Stop loss: Rs 297
On the weekly chart, the SBI stock has turned upward after taking support at the triangle pattern neckline placed around Rs 300-303. Further, volumes declined in the throwback, clearly suggesting a temporary pause before the stock resumes its uptrend. On the daily chart, it has broken out from a bullish flag pattern, suggesting higher levels in the coming trading sessions. The RSI has turned upward after taking support at the 50-level and has formed a positive reversal on the daily chart, suggesting bullishness in the stock.
Shankara Building Products | Buy | Target price: Rs 595-620 | Stop loss: Rs 485
On the daily chart, Shankara Building Products is on the verge of a breakout from a bullish flag pattern neckline placed at Rs 540. A successful breakout backed by healthy volumes can trigger a bear trend reversal, taking the stock higher. Further, following a series of lower lows and highs, the stock now has started forming higher highs and higher lows, clearly indicating that the downtrend has been arrested. RSI has turned upwards, breaking out of the upper end of the bear territory i.e. the 60-level and instead took support at this upper end of the bear territory recently during a throwback.
Vaishali Parekh, Senior Technical Analyst, Prabhudas Lilladher
Ambuja CementsNSE -2.43 % | Buy | Target price: Rs 240 | Stop loss: Rs 219
This stock has taken support near the significant 200-DMA, which is placed near Rs 216 and has made a recovery to indicate a positive bias. It can move further to Rs 240. The RSI has also shown a trend reversal to signify strength.
Jindal Steel & Power | Buy | Target price: Rs 190 | Stop loss: Rs 167
This stock has formed almost a higher bottom formation pattern on the daily chart, taking support near 50-DMA and has produced a positive candle pattern to signify strength. The RSI has also indicated a trend reversal, signalling a buy. “With good volume activity witnessed, we recommend a buy in this stock for an upside target of Rs 190, keeping a stop loss of Rs 167,” Parekh said.
Gajendra Prabu, Senior Technical Analyst, HDFC Securities
Hexaware TechnologiesNSE -1.12 % | Buy | Target price: Rs 390 | Stop loss: Rs 332
The stock formed and validated the Bullish Harami candle pattern formed on April 25 on the daily chart, which is a confirmation of the bullish reversal. It has provided a breakout of key short-term trendline. The price has started to form a higher top and higher bottom on intraday charts which is a bullish development. In addition, technical indicators are placed in favour of bulls.
State Bank of India | Buy | Target price: Rs 339 | Stop loss: Rs 298
This stock has completed a Three Wave decline from Rs 339.60 to Rs 303,.60 which is a major “wave ii/b” with the internals of a-b-c and now stock is in progress of “wave iii/c” up which, it could initially head towards Rs 340 which is slightly below the previous 52-week high. A few weeks back, the stock provided a breakout of contracting triangle and for the last couple of weeks, the stock was in a throwback fall. It has been maintaining a higher top and higher bottom formation in the bigger picture which is a bullish continuation structure. Apart from this, it is trading above all key moving averages of 21, 50 & 200-day EMAs.
Rajesh Bhosale, Technical Analyst, Angel Broking
Multi Commodity Exchange | Buy | Target price: Rs 925 | Stop loss: Rs 790
On the daily chart, this stock broke above all its recent hurdles convincingly, courtesy to its quarterly results. The said breakout from the resistance resembles a bullish reversal pattern known as ‘Cup N Handle’ which is supported with a good increase in volume. In addition, RSI after forming a base around 50, has confirmed a bullish crossover with its smoothened averages supporting the buy call.
Dr Reddy’s Laboratories | Buy | Target price: Rs 3,100 | Stop loss: Rs 2,775
During the week gone by, pharma stocks put up an outperformance, suggesting that the pharma sector is finally joining the bulls’ party. This heavyweight pharma stock, too, has broken above its recent consolidation and is now trading at 52-week high which supports the optimism. In addition, prices have closed above the higher band of Bollinger band, suggesting a strong uptrending move in the near term.
Jay Thakkar, CMT, AVP Equity Research, Anand Rathi Shares and Stock Brokers
Aurobindo Pharma | Buy | Target price: Rs 870 | Stop loss: Rs 820
The stock has provided a breakout from the triangular pattern which is a continuation pattern. The momentum indicator MACD is well into buy mode on the daily as well as weekly charts. This stock is likely to inch towards its life-time high levels.
HDFC BankNSE 1.60 % | Buy | Target price: Rs 2,410 | Stop loss: Rs 2,210
This stock has formed a falling channel in its Wave 4 and it has reversed well from the lower end of the falling channel. The stock has also taken good support at the lower end of the rising channel, hence the probability of Wave 5 up is quite high.
UltraTech CementNSE 0.15 % | Buy | Target price: Rs 4,780 | Stop loss: Rs 4,450
This stock has provided a breakout from the running triangular pattern with an increase in volumes, hence it is a price volume breakout. It has started Wave III of 3 of a minor degree and it is likely to inch towards its extension target of Rs 4,780. The support on the lower side is pegged at Rs 4,450.
(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)