Stocks to buy: After a negative ending last week, Indian stock market benchmarks, the Sensex and the Nifty 50, rose over half a per cent each in morning trade on Monday, October 14, on gains led by banking heavyweights. The Nifty Bank index rose over a per cent, with stocks such as Federal Bank, HDFC Bank, Kotak Mahindra Bank, IndusInd Bank, SBI and ICICI Bank rising over a per cent each.
Experts observe that the domestic market is going through a consolidation phase due to premium valuations amid a subdued outlook for Q2 results. Foreign capital is moving to the Chinese markets due to recent stimulus measures and low valuations.
"The recent increase in the US 10-year treasury yield, driven by an unexpected rise in core inflation and ongoing geopolitical challenges, has prompted FIIs to shift towards more affordable markets. This trend is expected to affect equity asset performance in the short term," said Vinod Nair, the head of research at Geojit Financial Services.
Market participants will closely monitor Q2 FY25 results. Experts see the possibility of a weaker quarter-on-quarter performance.
"The risk of downgrades is increasing, which could reduce India’s premium valuation in the short to medium term," said Nair.
Experts suggest one must be prudent while selecting stocks at this juncture. They recommend buying these eight stocks, expecting them to rise 6-21 per cent in the next three to four weeks. Take a look:
The stock has witnessed a decent correction from the ₹3,035 level and has shown signs of bottoming out near the ₹2,730 zone with a pullback indicated to improve the bias, and further rise can be expected.
The RSI has corrected well from the overbought zone and has indicated a positive trend reversal to signal a buy.
"With the chart formation technically looking good, we anticipate carrying on with the positive move further ahead and suggest buying the stock for an upside target of ₹3,040, keeping the stop loss ₹2,680," said Koothupalakkal.
After a short period of a downtrend, the stock has recently indicated a breakout above the descending channel pattern on the daily chart to improve the bias.
With a higher low formation pattern, the stock has moved past the important 50EMA (exponential moving average) of ₹227 to further strengthen the trend, and a further rise in the coming days is expected.
"With the RSI on the rise and indicating a positive trend reversal to signal a buy, we suggest buying the stock for an upside target of ₹260 level, keeping the stop loss of ₹217," said Koothupalakkal.
The stock has witnessed a huge erosion in the last three months from the level of ₹1,794 to consolidate and bottom out near ₹1,080 zone. It currently has indicated a pullback to move past the important 200-period MA (moving average) at ₹1,140 levels to improve the bias.
The chart looks very attractive, and the RSI has been hovering near the highly oversold zone for quite some time. It has shot up and is on the rise to indicate strength, with immense upside potential visible.
"We anticipate further gains in the coming days. With the stock technically well-positioned, we suggest buying the stock for an upside target of ₹1,430 level, keeping the stop loss of ₹1,090," said Koothupalakkal.
The share price of HDFC Bank is currently trading within a broad horizontal range and initiated to form a higher lows pattern on the weekly chart, indicative of an ascending triangle formation.
This suggests a positive price action toward the upper boundary of the range. The bullish outlook is further supported by prices trading above the key moving averages of 21-week and 55-week EMAs.
"Investors are advised to consider initiating long positions in the ₹1,630–1,640 price range, targeting ₹1,750 and ₹1,770. To manage risk effectively, a stop loss should be placed below ₹1,575," said Upadhyay.
Prices experienced a sharp rebound from the critical horizontal support zone of ₹2,680–2,700, accompanied by a substantial increase in trading volumes on the weekly chart.
This signals a potential bullish reversal at the current price levels. The long-term outlook remains positive if the stock trades above the ₹2,680 level.
"Given the current market conditions, any corrective decline toward the ₹2,760 level presents a favourable opportunity to establish fresh long positions, with upside targets of ₹2,955. To manage risk effectively, a stop loss should be placed below ₹2,660," said Upadhyay.
The share price of Dalmia Bharat is trading above the bullish trendline, showing a consistent formation of higher lows on the weekly chart.
The recent price formation can be viewed as an ascending triangle pattern in a shorter timeframe.
This setup suggests a positive outlook, indicating further gains ahead.
"Investors are encouraged to take advantage of this bullish structure by initiating long positions within the ₹1,850–1,860 range. The initial target is ₹1,910, followed by an extended upside to ₹2,035. A stop loss should be placed below ₹1,760 to effectively manage downside risk, ensuring protection while capturing the bullish trend," said Upadhyay.
Symphony displays a breakout from a rounding bottom pattern on the daily chart. This breakout, supported by increased trading volume, signals a strong bullish trend.
"A close above ₹1,825 could open the door to short-term targets of ₹2,100 and ₹2,200. On the downside, immediate support is at ₹1,750, creating a potential buying opportunity on pullbacks," said Bhojane.
Exide Industries is trading at ₹530.5, having recently broken out of and retested a falling trend line.
This breakout and a notable increase in trading volume suggest the potential for further upside.
"A close above ₹535 could propel the stock towards short-term targets of ₹600 and ₹620. On the downside, immediate support is positioned at ₹500, providing an opportunity for buying on dips. To manage risk, a stop-loss at ₹495 is advisable to mitigate the impact of adverse market movements," said Bhojane.
Granules India is currently trading at ₹603.85, consolidating near a key support level on the daily chart.
This consolidation, coupled with a significant increase in trading volume, indicates potential bullish momentum.
"A decisive close above ₹610 could pave the way for short-term targets of ₹665 and ₹700. On the downside, immediate support lies at ₹575, offering a potential buying opportunity on dips. For effective risk management, placing a stop-loss at ₹560 is prudent to protect against unexpected market reversals," 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.
