NEW DELHI: Fridays rally brought back smiles in the market, but they faded quickly on Monday as stocks developed cold feet amid weak global cues.
Asian shares plunged, as the spectre of trade war returned after the US President said fresh tariffs on China are a possibility.
The rupee, too, failed to hold the strength it had shown on Friday and slipped amid dollar buying by banks and importers. At 9:30 am, the domestic unit traded 28 paise lower at 73.86.
However, amid all the uncertainty and volatility, analysts said there are stock-specific opportunities across sectors. Based on various brokerage recommendations, we compiled a list of top 10 stocks that are expected to log gains over the next three weeks.
Jay Thakkar, CMT – head technical and derivatives research – AVP equity research, Anand Rathi Shares and Stock Brokers
Bajaj Finance| Buy| Target price: Rs 2,420| Stop loss: Rs 2,180
This stock formed a bullish inverse head and shoulders pattern, which is quite a positive signal for the short term. “Momentum indicators have also showed a buy crossover. We recommend buying this stock for a target of Rs 2,420 with a stop loss at Rs 2,180,” Thakkar said.
IRB Infrastructure Developers| Buy| Target price: Rs 146| Stop loss: Rs 128
This stock seems to have completed a clear Five Waves falling structure and has formed a positive weekly close, which is quite positive for short-term trend. “The stock has good support at the lower end at Rs 128. Hence with that as a stop loss, one can buy the stock for a target of Rs 146,” Thakkar said.
Manappuram Finance| Buy| Target price: Rs 83| Stop loss: Rs 69
This stock has formed a clear inverse head and shoulders pattern, which is quite positive for the stock in the short term. The momentum indicator has also provided a buy crossover.
Mazhar Mohammad, chief strategist – technical research & trading advisory, Chartviewindia.in
Cummins India| Buy| Target price: Rs 727| Stop loss: Rs 657
This counter appears to have made a short-term bottom around Rs 642 level ahead of the market and formed a Bullish Engulfing pattern on the weekly charts, perhaps pointing towards the beginning of a short-term uptrend. Sustaining above Thursdays low of Rs 661, the stock is expected to retrace at least 50 per cent of its last leg of fall from the high of Rs 800 and test its 200-day moving average. Therefore, it looks like a good opportunity for positional traders to buy it for an initial target of Rs 727, with a stop of Rs 657.
ITC| Buy| Target price: Rs 297| Stop loss: Rs 260
Recent correction almost pushed this stock back to where it had started a decent upward move in the recent past from the lows of Rs 259 – 322 levels. This proves a better entry point once again. Fridays strong rally accompanied by a Hammer formation on the weekly chart is pointing towards the beginning of a short-term uptrend. Hence, sustaining above the recent lows if the pullback materialises in the broader market, then this counter shall retrace at least 62 per cent of its entire fall from the recent high of Rs 322. Positional traders should buy the stock for a target of Rs 297 with a stop at Rs 260.
State Bank of India| Buy| Target price: Rs 290| Stop loss: Rs 257
This counter appears to have bottomed out around Rs 253 on September 21 itself, and for last couple of sessions, it was consolidating around Rs 260 level. Hence, positional traders are advised to make use of this consolidation as on any pullback attempt, it can initially target Rs 280 level and thereafter rally towards Rs 290 level. The stop loss for this trade should be at Rs 257.
Gajendra Prabhu, technical research analyst, HDFC Securities
ICICI Bank| Buy| Target price: Rs 350| Stop loss: Rs 300
This stock has validated the Doji candle pattern formed on the weekly chart in the previous week (moved above candles high), thus confirming a bullish reversal. It has witnessed a trendline breakout, which is a bullish development. The price is on course to make higher highs and could possibly make a new lifetime high, as the stock is in the internals of Wave V. In addition, the stock is placed well above the 21, 50 & 200-day EMAs, which can add strength to the bulls. “Traders may look to buy the stock at current market price and add on dips till Rs 310 for an upside target of Rs 350 over the next 2-3 weeks. Place a stop loss at Rs 300 on a closing basis,” Prabhu said.
PowerGrid| Buy| Target price: Rs 205| Stop loss: Rs 180
The stock has completed a major Three Wave decline from Rs 205 to Rs 182, which is a major “Wave B”, and now it is in the process of “Wave C” upward, which could ideally make a new higher high above the previous swing high of Rs 205. The stock is rebounding from 75 per cent retracement of last rising leg started from Rs 174 to Rs 205. In addition, the stock has formed a hammer candle on the weekly chart, which is a bullish reversal formation. “Traders may look to buy the stock at current market price for an upside target of Rs 205 over the next 2-3 weeks. Place a stop loss at Rs 180 on a closing basis,” Prabhu said.
Vaishali Parekh, senior technical analyst, Prabhudas Lilladher
Mahindra & Mahindra| Buy| Target price: Rs 840| Stop loss: Rs 715
This stock has seen a steep correction in last one month from the peak of Rs 976 to show signs of bottoming out at Rs 715-720 levels. Currently, it is making a positive bullish candle formation to signify strength. It has the potential to trigger further upside movement in the coming days. The RSI has also entered the highly oversold zone and shown a trend reversal to give a buy signal. “With consistent volume activity seen on the counter, we recommend a buy in this stock for an upside target of Rs 840, keeping a stop loss of Rs 715,” said Parekh.
Voltas| Buy| Target price: Rs 560| Stop loss: Rs 480
This stock has witnessed a decent correction from Rs 636 to bottom out at around Rs 475 and has seen a bounce to signify upside movement with strength. The charts look very attractive and have the potential to scale up to Rs 555-560 levels in the coming days. The RSI has hit the oversold zone and indicated a trend reversal to give a buy signal. “With good volume participation, we recommend a buy in this stock for an upside target of Rs 560, keeping a stop loss of Rs 480,” Parekh said.