NEW DELHI: Broadening worries of global economic slowdown and US-China trade frictions put a dampener on investor sentiment as headline indices Sensex and Nifty fell early Monday.
The International Monetary Fund (IMF) on Sunday warned governments to prepare for an economic storm as growth undershoots expectations.
A new round of trade talks is to begin in Beijing today after recent negotiations yielded no breakthrough. The wait for a deal between the two parties is making investors wary, analysts said.
The Sensex slipped over 180 points and the Nifty touched 10,875-mark within the first 15 minutes of the Monday’s session. Around 9:35 am, the BSE Sensex came off 151 points at 36,395 while the Nifty was 64 points lower at 10,879.
Technical analysts see stock-specific opportunities in the bearish market. Based on various brokerage recommendations, here is a list of 11 stocks that can potentially deliver solid gains over the next 2-3 weeks.
Mazhar Mohammad, Chief Strategist, technical research and trading advisory, Chartviewindia.in
Lupin| Buy| Target price: Rs 890| Stop loss: Rs 797
This counter appears to be repeatedly attracting buying interest around Rs 800 level, as pointed out by the long lower shadows of the last three sessions. Besides, the price behaviour of the last couple of weeks is suggesting that it has carved out a trading range between Rs 900–800 levels. “Positional traders should buy now and make use of dips, if any, towards Rs 810 to accumulate. Look for a target of Rs 890, with a stop loss of Rs 797,” said Mohammad.
Supreme Industries| Buy| Target price: Rs 1,078| Stop loss: Rs 977
After the recent fall from around Rs 1,200 level, this counter has been consolidating around Rs 980 for the last couple of sessions and appears to be positioning itself for a pullback. Upward momentum in the counter shall pick up on a close above Rs 1,028. “Positional traders can initiate long bets with a stop loss below Rs 977 on a closing basis and look for a target of Rs 1,078,” Mohammad said.
Nagaraj Shetti, Senior Technical & Derivatives Analyst, HDFC Securities
Divi’s Laboratories| Buy| Target price: Rs 1,850| Stop loss: Rs 1,570
After showing a larger sideways range movement in the last couple of months, the stock witnessed a sharp upside breakout on Friday to close higher. An intermediate uptrend in the stock over the last many months, as per the positive sequence of higher tops and bottoms, can be seen. Last week’s upside breakout was associated with a spurt in volume. “With positive chart pattern, one may look to buy Divi’s Labs at the current market price and should add more on dips to Rs 1,605,” said Shetti.
Bata India| Buy| Target price: Rs 1,365| Stop loss: Rs 1,105
After showing a minor downward correction in the previous week, the stock has bounced back smartly last week to close higher. We observe a consistent uptrend in the stock price in the last few months. The volume has expanded last week and the weekly momentum oscillator, like 14 period RSI, is showing a positive signal. “Buying can be initiated in Bata India at the current market price, add more on dips to Rs 1,140,” Shetti said.
Vaishali Parekh, Senior Technical Analyst, Prabhudas Lilladher
Kotak Mahindra Bank| Buy| Target price: Rs 1,420| Stop loss: 1,245
The stock has been gradually rising with a positive bias, forming a higher bottom formation pattern in the daily chart. “The indicators are all favourable and with the RSI on the rise with decent volume participation witnessed. We recommend a buy on this stock for an upside target of Rs 1,420, keeping a stop loss of Rs 1,245,” said Parekh.
BEML| Buy| Target price: Rs 850| Stop loss: Rs 735
The stock has seen a correction and indicated bottoming out near Rs 730–735 levels. It is showing a positive bullish candle pattern in the daily chart to signify strength and has the potential to rise further in coming days. The RSI has indicated a trend reversal from the highly oversold zone and signalled a buy to maintain a positive bias.
Kkunal Parar, Senior Technical Research Analyst, Choice Broking
Gruh Finance| Buy| Target price: Rs 277| Stop loss: Rs 230
On a daily scale, the stock has formed a “saucer bottom” formation which suggests bulls may continue to pull the counter. Furthermore, the stock has started to trade above its 21 days exponential moving average (EMA), indicating a bullish run in the counter.
UPL| Buy| Target price: Rs 857.50| Stop loss: Rs 796
On the weekly chart, the stock has been trading with a positive crossover of 21*50 Weeks moving average which is a bullish crossover. The stock has given a breakout of its “rectangle pattern” also on the daily chart which indicates an upside movement in the counter. The daily momentum indicator, RSI reading is at 66.48 level with a positive crossover.
Sameet Chavan, Chief Analyst, technical & derivatives, Angel Broking
Bajaj Finance| Buy| Target price: Rs 2,898| Stop loss: Rs 2,620
This stock has seen a gradual recovery in the last three months after undergoing a massive correction in September. The last couple of weeks has been good for this stock and it went on to confirm a breakout from its recent congestion zone around Rs 2,650. In addition, the ‘RSI smoothened’ on the daily chart has surpassed the threshold level of 70, which augurs well for the bulls.
Wockhardt| Buy| Target price: Rs 468| Stop loss: Rs 395.80
Due to recent selloff, the stock has entered into deeply oversold territory. On Wednesday, a V-shaped recovery from its multi-year falling trend line support area was witnessed. In the process, the stock formed a ‘bullish hammer’ pattern. The said pattern has been confirmed on a closing basis and hence, a good relief move in this counter is expected.
Mustafa Nadeem, CEO, Epic Research
Lupin| Buy| Target price: Rs 880| Stop loss: Rs 805
The stock has been oscillating in a range for the past few weeks, making a channel formation and is bounded on each side with resistance at Rs 885 and support at Rs 810. Price action suggests a bottom formation at important support levels. “We expect the stock to retrace towards the upper level of Rs 870-880. Place a stop loss at Rs 805,” Nadeem said.
Bharti Airtel| Buy| Target price: Rs 335| Stop loss: Rs 300
The stock is witnessing a bottoming out formation as it has been making a rounding pattern. “A contraction in the range and support at the lower level of Rs 300 signal a buying opportunity in the stock for the upside target of Rs 335 and a stop loss at Rs 300,” said Nadeem.
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