Stocks to buy: The Indian stock market benchmark Nifty 50 opened with a decent gain of about 0.40 per cent at 24,636.35 on Monday, August 19. The index saw a solid gain of nearly 2 per cent in the previous session, settling at 24,541.15, thanks to across-the-board buying in light of positive global cues.
The domestic market is witnessing the trend of buying on dips and selling at higher levels. Despite premium valuation, the market has been resilient due to relentless buying by domestic investors.
Last week, the market made several attempts to move higher, but they were quickly reversed, suggesting possible selling pressure.
According to Prashanth Tapse, Senior vice president (Research) at Mehta Equities, the Nifty has support at 24,101 and aggressive targets in the 24,900-25,100 zone.
Experts say investors should focus on quality stocks in the short term and consider buying stocks with favourable technical indicators. Based on the recommendations of several experts, here are 11 stocks that can rise 5-16 per cent in the next 3-4 weeks. Take a look:
In recent trading sessions, IndusInd Bank has demonstrated resilience by holding steady at its crucial historical support level of ₹1,335.
This level has historically been significant, acting as a strong foundation where buyers step in, preventing further declines.
Moreover, a bullish AB=CD pattern near this support level is a notable technical signal.
The AB=CD pattern is a classic chart pattern in technical analysis that indicates a potential reversal in trend, suggesting that the stock may be poised for an upward move.
Complementing this, the Relative Strength Index (RSI) on the daily chart has formed an impulsive structure, which typically signals strong momentum and increasing buying pressure.
These technical indicators make IndusInd Bank an attractive candidate for a long position.
Tata Consumer reached ₹1,247 level on July 23, 2024, but since then, it has experienced a correction of approximately 96 points.
Currently, the stock is showing signs of finding support near its previous breakout range, a crucial level that often acts as a price floor.
This support coincides with a 0.382 Fibonacci retracement level from the stock's earlier uptrend, which began at ₹1,016 and extended to ₹1,247.
The price alignment with this retracement level adds further significance to this support area. Additionally, technical indicators are favourable; the 'Supertrend Indicator' on the hourly chart has shifted to a bullish mode, suggesting potential upward momentum.
Moreover, the 9-period Simple Moving Average (SMA) is providing additional support, reinforcing the idea that the stock is poised for a rebound.
Currently, the stock is beginning to show signs of stabilizing as it approaches a critical support level near its previous breakout range.
This level is significant because such breakout ranges often serve as solid support zones, acting as a price floor where buyers might step in.
This support area is further reinforced by two key technical indicators: the 100-day Exponential Moving Average (DEMA) and the 0.50 per cent Fib retracement level from the stock's prior uptrend, which began at ₹2,163 and peaked at ₹2,866.
The convergence of these indicators at the current price level highlights the importance of this support zone and suggests it may hold.
Moreover, technical indicators are starting to turn favourable.
Specifically, the RSI on the hourly chart has formed a bullish divergence, a pattern that often signals a potential reversal or upward momentum in price.
The stock witnessed a strong rally recently and corrected significantly to arrive near the important 100-period moving average (MA) at the ₹486 level.
It has shown signs of bottoming out with a decent pullback witnessed currently.
With a positive bullish candle formation, it has moved past the important 50EMA (exponential moving average) level of ₹504, improving the bias.
The chart looks attractive, with indicators like RSI indicating a positive trend reversal after significantly cooling off from the highly overbought zone.
The company has produced excellent results. The stock has arrived at an attractive level after a decent correction from ₹5,860 level, showing signs of bottoming out just above the significant 50EMA level of ₹4,550.
The RSI has cooled off significantly from the overbought zone. It is well-placed currently, indicating a positive trend reversal to signal a buy with much upside potential visible from the current rate.
The stock has witnessed a decent correction from the level of ₹753, currently showing signs of bottoming out near ₹570 level and indicating a pullback to improve the bias, anticipating a further rise in the coming days.
The RSI has corrected significantly from the overbought zone to arrive near the oversold zone.
It has indicated a positive trend reversal to signal a buy and has much upside potential from the current rate.
ITC has been consolidating after an impulse move on the daily chart.
The stock is close to breaking out of its consolidation range, with a significant increase in trading volumes.
The RSI is at 68.02, with a positive crossover, indicating increasing buying momentum.
Additionally, ITC has found support near its short-term (20-day) EMA and is trading above its key moving averages, signalling a likely continuation of the uptrend.
"If ITC can stay above ₹510, its all-time high, it may move towards higher targets of ₹545 to ₹560," said Matalia.
Bajaj Auto is currently experiencing a long-term uptrend, showing a bullish pattern with a consistent series of higher highs and higher lows over the past few months.
The stock has formed a Rounding Bottom on the daily chart, approaching a breakout zone.
The RSI is at 61.44 and trending upwards, indicating increasing buying momentum.
Additionally, Bajaj Auto is trading above its short-term (20-day), medium-term (50-day), and long-term (200-day) EMAs, suggesting potential for continuous upward momentum.
"If the stock maintains its position above the ₹10,000 level, it could likely continue its upward trajectory toward new highs," said Matalia.
Kotak Mahindra Bank is trading near ₹1,777.3 level and is on the verge of breaking out of a descending triangle pattern on the daily chart.
The RSI is at the 49.27 level, which is in the lower range of the neutral zone, and there is a positive crossover, indicating that the stock is near an area where buyers might step in.
Moreover, the stock has surpassed its medium-term (50-day) EMA and long-term (200-day) EMA levels, suggesting strength in the underlying.
"If Kotak Mahindra Bank gives a breakout and maintains its position above ₹1,790 levels, it is poised to move towards upward targets of ₹1,910 and ₹1,930," Matalia said.
Prices have witnessed a double-bottom formation on the daily chart, indicating a potential reversal. A
significant recovery has been observed from the vicinity of the 100-day EMA. The MACD indicator also signals a bullish reversal at the current level.
Nippon Life India AMC reached a new 52-week high on Friday, supported by a substantial increase in trading volume, reflecting heightened buyer interest.
The stock trades above its short-term moving averages, specifically the 21-day and 55-day EMAs.
Additionally, the MACD indicator has generated a positive crossover, further reinforcing the continuation of the bullish trend.
Prices have experienced a sharp rebound from a critical horizontal support zone, which coincides with the 100-day EMA.
Given the recent price recovery, we believe the short-term bottom has been established, positioning the stock to extend Friday’s gains toward ₹2,785.
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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.
