Shares to buy: Rising for the third consecutive week, the frontline index Nifty 50 rose about 1.5 per cent for the week ended Friday, September 27, primarily driven by optimism regarding the US Fed rate cuts. China’s economic stimulus announcement also contributed to positive market sentiment.
According to Amol Athawale, VP of technical research at Kotak Securities, a bullish candle on weekly charts and uptrend continuation formation on daily and intraday charts indicate further uptrend from the current levels.
"We believe that the current market texture is bullish, but buying on dips and selling on rallies would be the ideal strategy for the short-term traders," said Athawale.
"26,100/85,300 and 26,000/85,000 would act as key support zones while 26,400-26,500/85,900-86,300 would act as crucial resistance areas for the bulls. The sentiment could change below 26,000/85,000, and traders may prefer to exit the long trading positions," Athawale said.
While Q2 earnings and global cues will influence market sentiment, experts say one must be prudent in stock selection and bet on only quality stocks. They recommend buying these 11 stocks, expecting them to rise 8-17 per cent in the next three to four weeks. Take a look:
HAL rose to ₹4,950 on September 4, 2024. Since then, the stock has experienced a notable decline, losing around 748 points, or approximately 16 per cent of its value.
This decline has brought the stock back into a crucial demand zone, suggesting potential buying interest at this level.
On the weekly chart, HAL has formed a bullish Harami candlestick pattern, which is typically seen as a reversal signal, indicating a potential for an upward movement in price.
Furthermore, on the daily chart, the Relative Strength Index (RSI) has created a V-shaped impulsive structure around the 30 level, signifying that the stock is in the oversold zone.
This RSI pattern is notable as it surpassed its previous swing high, adding further bullish sentiment.
In the first half of September this year, ONGC faced heavy selling pressure, resulting in a significant drop of nearly 15 per cent from its peak of ₹345.
This steep decline has brought the stock back into a critical demand zone, where buyers will likely emerge, showing potential for a rebound.
ONGC has formed a double bottom pattern on the daily chart, which is a bullish reversal signal.
Additionally, there is a bullish divergence on the Relative Strength Index (RSI), further reinforcing the likelihood of an upward move.
In the most recent trading session, the stock saw strong buying interest near the ₹290 level and closed near the session's high, signalling renewed strength.
The nearly three-month-long bearish phase in Steel Authority of India Limited (SAIL) appears to be nearing its end, as a bullish pattern emerges on the daily chart.
The stock has formed a triple bottom structure in the ₹124- ₹130 zone, a strong reversal signal indicating that the downward trend may be exhausted.
The triple bottom pattern has developed near the 200-day exponential moving average (DEMA), further appealing to the stock.
Additionally, the daily RSI has broken through a bearish trendline, signalling a shift in momentum towards the bullish side.
The stock has witnessed a gradual slide from the level of ₹585 and recently, after a short consolidation period, has indicated a strong bullish candle formation on the daily chart, moving past the 50EMA level at ₹492 to improve the bias, anticipating a further rise.
The RSI has witnessed a spike after a long time, indicating a positive trend reversal to signal a buy.
The stock has slipped gradually from ₹160 and has shown signs of bottoming out near the 200-period moving average (MA) at ₹126.
It has indicated a big bullish candle formation to touch the 50EMA level of ₹134 with decent volume participation to improve the bias and indicate a further rise.
The RSI has signalled a steep rise from the consolidation period to signal a buy and, with much upside potential visible, can carry on with the positive move further ahead.
The stock has indicated a clear breakout above the descending channel pattern formed on the daily chart at ₹110.
Also, the confluence of important 50EMA and 200-period MA has been breached to improve the bias, signalling a further rise in the coming days.
The trend has been strengthened by rising RSI, with much upside potential visible from the current levels.
Prices have successfully broken through the falling trendline resistance on the daily chart, supported by a substantial increase in trading volumes, indicating the entry of fresh buyers.
Additionally, prices have exceeded the 21-day exponential moving average (EMA), which had previously acted as a significant resistance level.
The 14-day RSI has risen above the 50-mark and breached trendline resistance, signalling strengthening momentum.
Moreover, the MACD indicator has triggered a buy signal, with the MACD line crossing above the signal line and the histogram turning positive.
Prices have surpassed their previous peak, accompanied by a significant increase in trading volumes, confirming the entry of fresh buyers.
The broader trend remains bullish, as evidenced by the formation of higher highs and higher lows.
The bullish crossover between the 10-day and 21-day EMAs further supports the outlook for continued upward momentum.
Additionally, the MACD indicator has generated a positive signal, with the MACD line crossing above the signal line and the histogram reflecting a positive trend.
Prices are now in a buy-on-dip mode, with any pullback toward the 21-day EMA likely to attract renewed buying interest.
Prices form an ascending triangle on the daily chart, a bullish continuation pattern that signals the likely extension of the prevailing upward trend.
Currently, prices are trading near the lower boundary of the triangle, with a bullish-engulfing candlestick pattern emerging on the daily chart.
In addition to this positive development, prices are finding strong support near the 150-day EMA, which has historically served as a critical support level.
The recent rebound from the rising support line and the 150-day EMA further strengthens the case for a resumption of the bullish trend, with potential upside targets of ₹662 and ₹668.
On the downside, immediate support is seen at ₹584. Additionally, the 14-day RSI has sharply reversed just above the oversold territory and is now forming higher highs, suggesting strengthening momentum.
Cummins India shows signs of a potential breakout from its range. A significant increase in trading volume indicates a bullish trend.
"If the price closes above the ₹3,870 level, it could reach short-term targets of ₹4,400 and ₹4,500. On the downside, immediate support is at ₹3,740, presenting a buying opportunity on dips. A stop loss at ₹3,650 is recommended to manage risk prudently," said Bhojane.
Deepak Nitrite has shown a possible breakout of a falling trendline, with a significant increase in trading volume, suggesting a potential bullish breakout.
"If the price closes above the ₹2,770 level, it could reach short-term targets of ₹3,130 and ₹3,200. On the downside, immediate support is at ₹2,840, offering a buying opportunity on dips. A stop loss at ₹2,770 is advisable to manage risk effectively," said Bhojane.
Exide Industries has recently broken out of a falling trendline on the daily chart, accompanied by a significant increase in trading volume, indicating a strong bullish trend.
"If the price closes above the ₹500 level, it could reach short-term targets of ₹560 and ₹570. On the downside, immediate support is at ₹480, offering a buying opportunity on dips. Setting a stop loss at ₹465 is advisable to manage risk effectively," said Bhojane.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
