Stocks to buy: Indian stock market benchmarks, the Sensex and the Nifty 50, hit their fresh record highs and extended their winning run into the third consecutive week for the week ended Friday, August 30, led by healthy buying by foreign institutional investors (FIIs) amid favourable global sentiment, supported by better-than-expected US macroeconomic data and growing anticipation of an interest rate cut by the US Fed in the upcoming September meeting.
Experts expect the bullish texture to continue. However, the levels of 25,350-25,500 could act as resistance.
"The Nifty 50 formed a bullish candle on weekly charts, and it is also holding a higher bottom formation on intraday charts, which is largely positive. We believe that, for the trend-following traders now, 25,000 would act as a sacrosanct support zone. As long as the market trades above the same, the bullish texture will likely continue," said Amol Athawale, VP-Technical Research at Kotak Securities.
"On the higher side, 25,350-25,500 would be the crucial resistance areas for the bulls. Below 25,000, the uptrend would be vulnerable, and traders may prefer to exit from long trading positions," said Athawale.
Even though the market sentiment appears positive, stretched valuations and global cues may keep it volatile in the short term. At this juncture, experts advise investors to consider buying stocks with favourable technical indicators for the short term.
Based on the recommendations of several experts, here are 10 stocks that can rise 6-14 per cent in the next two to three weeks. Take a look:
Radico Khaitan stock has consolidated over the past eight to nine months, trading in a range of approximately ₹1,600 to ₹1,865.
This consolidation indicates a period when the stock was gathering strength, with neither bulls nor bears gaining the upper hand.
Recently, however, Radico has broken out of this range, signalling a potential shift in market sentiment.
The breakout was accompanied by significant weekly trading volume, adding credibility to the upward movement.
Moreover, technical indicators further strengthen the bullish outlook.
Before the breakout, Radico found support at the "Ichimoku Cloud", a technical indicator that often signals potential trend reversals or continuations.
The stock's Relative Strength Index (RSI) on a weekly basis has also broken above a bearish trendline that has persisted for the last eight to nine months, indicating a shift from bearish to bullish momentum.
"Given these positive technical signals, we recommend going long on the stock within the price range of ₹1,925 to ₹1,945. The stock shows potential for an upside target of ₹2,200. However, it is advisable to maintain a stop loss at ₹1,799 on a daily closing basis to manage risk and protect against potential downside," said Patel.
Recently, Allcargo Logistics stock formed a bullish bat pattern, a harmonic chart pattern known for indicating potential reversals.
This pattern emerged after the stock created a triple bottom structure near its historical low of ₹61, which is a strong sign of price support.
The triple bottom pattern typically signifies that the stock has tested a key support level multiple times, failing to break below it, which suggests that the downward momentum is weakening.
A bullish divergence was observed just before the stock reversed from the 61 level, where the price made a lower low, but the momentum indicator (such as the RSI ) showed a higher low.
This divergence is a classic signal that the downtrend might be losing steam, hinting at a potential upward reversal.
"Based on these technical indicators, it was advised to buy the stock on dips in the range of ₹66-70, with an upside target of ₹80. To manage risk, a stop loss is suggested at ₹62, based on a daily closing price, which would limit potential losses if the stock breaks below this key support level," said Patel.
Asian Granito has recently confirmed a significant breakout from a long-standing falling trend line, surpassing the ₹86 mark.
This trend line breakout indicates a potential shift in the stock's price trajectory, signalling the end of a downtrend and the possible beginning of an upward move.
In addition to this technical signal, the stock has formed a pattern resembling a bullish head and shoulders.
This pattern is typically considered a reliable reversal indicator from a downtrend to an uptrend.
The breakout and pattern formation is supported by increased trading volumes, suggesting strong buying interest, and the positive alignment of momentum oscillators, which reflect increasing bullish momentum.
Prices witnessed a decisive breakthrough of the critical horizontal resistance zone between ₹1,820-1,830, a level that previously acted as a strong supply zone.
This breakout has been accompanied by a notable surge in trading volumes, indicating heightened participation from new buyers.
The price action remains firmly in a bullish trend, characterized by higher highs and higher lows.
Furthermore, a bullish crossover between the 10-day and 20-day EMAs (exponential moving averages) and positive momentum in the MACD indicator reinforces the probability of sustained bullish momentum.
Recently, the prices have broken out from an ascending triangle pattern on the daily chart.
Following a retracement to the breakout point, the prices have begun to reverse with a significant increase in trading volumes, signalling the initiation of fresh long positions.
The chart pattern reveals a series of higher highs and higher lows, while the 55-day and 100-day EMAs remain well below the current share prices.
The 14-day RSI has sharply rebounded above the 50-mark, indicating the relative strength of the prices.
Minda Corporation shares have undergone a corrective decline of nearly 14 per cent from their all-time high a few weeks ago.
Given the prevailing uptrend, this correction presents an opportunity to initiate fresh long positions.
Despite the recent decline, the prices have remained above the rising trendline support on the daily chart and the 21-day EMA.
The trading volumes have been significantly lower in recent sessions, suggesting limited participation from sellers.
“We anticipate that the prices may soon reverse direction from the current level,” said Upadhyay.
TCS is in a long-term uptrend, consistently forming higher highs and higher lows on the daily chart.
The stock recently broke out of a consolidation range, marked by a strong bullish candle supported by rising trading volumes.
The RSI stands at 60.38 and is trending upwards, indicating the stock is not yet overbought, favouring the continuation of the uptrend.
Additionally, the stock is trading above its key moving averages, including the short-term (20-day) EMA, medium-term (50-day) EMA, and long-term (200-day) EMA, further reinforcing the bullish outlook.
"If the stock maintains its position above the ₹4,600 level, it could likely continue its upward trajectory toward new highs," said Matalia.
Eicher Motors has recently rebounded from its demand zones and shows signs of a potential breakout from its consolidation range.
The stock is supported by notable trading volumes, indicating strength in its bullish momentum.
The RSI stands at 58.84 and is trending upward, signalling increasing buying pressure and the likelihood of a continued bullish trend.
Meanwhile, the stock has found support near its key moving averages, including the short-term (20-day) EMA and medium-term (50-day) EMA levels, further reinforcing its bullish trend.
"A breakout above ₹5,000 would confirm the uptrend, setting up potential targets of ₹5,370 and ₹5,425," said Matalia.
United Spirits is in a long-term uptrend, near its record-high levels.
The stock has consistently formed higher highs and higher lows on the daily chart, and it has developed a double-bottom pattern, signalling a potential breakout from its current range.
The RSI is at 64.41 with a positive crossover, indicating increased buying momentum. Additionally, the stock has recently bounced from its 20-day EMA, reinforcing the strength of the ongoing uptrend.
"If the stock sustains above ₹1,490 after rebounding from its support zones, it is well-positioned to reach upward targets of ₹1,610 and ₹1,625," said Matalia.
The stock has slipped quite significantly from the peak of ₹1,908. It has shown signs of bottoming out near the 50EMA of ₹1,620 with a positive candle formation.
It has witnessed a pullback to improve the bias; further rise is anticipated.
The RSI has cooled off significantly from the overbought zone and is currently well-placed, indicating a positive trend reversal to signal a buy.
The stock has maintained a strong base near ₹750, near the 200-period moving average (MA) and indicated a decent pullback to improve the bias moving past the 50EMA and 100-period MA at ₹807 and ₹820 levels, respectively.
The RSI is on the rise, indicating strength, and can continue with the positive move.
The stock has witnessed a decent pullback from near the critical 200-period MA at ₹650, taking support.
After a short period of consolidation near the confluence of 50EMA and 100-period MA at ₹740, it has indicated a bullish candle formation to improve the bias further on the daily chart.
The RSI is on the rise, indicating a positive trend reversal to signal a buy.
"With the chart looking attractive with a breakout indication, we anticipate further rise with immense upside potential visible from the current rate, and we suggest buying the stock for an upside target of ₹840, keeping the stop loss of ₹717," said Koothupalakkal.
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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.
