Stocks to buy: Indian stock market benchmark Nifty 50 witnessed high volatility in morning trade on Monday, October 7, as market sentiment remains cautious amid rising tensions in the Middle East. Moreover, strong US job data dented hopes of a significant 50 bps rate cut by the US Fed in November.
The India VIX volatility index gained over 6 per cent on Monday as the Nifty 50 initially gained around 0.5 per cent, only to reverse course and drop by more than 0.5 per cent during the morning session.
This week, RBI MPC, the FOMC Meeting Minutes and the US CPI data are the key events on investors' radar.
Q2 earnings, global cues, and geopolitical news flow will influence market movement in the near term. Experts expect the market to remain volatile in the short term, suggesting one must be prudent in stock selection and bet on only quality stocks. They recommend buying these 9 stocks, expecting them to rise 8-20 per cent in the next three to four weeks. Take a look:
After peaking at ₹817.40, SBI Card stock saw a steep drop of nearly 10 per cent. Recently, it tested a key demand zone that coincides with the 0.618 per cent retracement of its prior upward movement.
A bullish bat pattern has also emerged on the daily chart near the ₹730 level.
"We recommend going long on the stock in the ₹730-735 range, with a target of ₹810 and a stop loss at ₹692 on a daily closing basis," said Patel.
SDBL reached near ₹149 level in May 2024, but since then, it has experienced a significant decline, losing approximately 29 per cent.
This sharp decline brought the stock down to a critical support level, forming a triple bottom pattern in the range of ₹105-108.
The triple bottom pattern at a previous demand zone is often considered a bullish signal, suggesting that the stock has found strong support at these levels and may be poised for a reversal.
On a daily scale, a bullish bat pattern is seen near ₹110-109, which aligns with the previous demand zone, thus making it lucrative.
"These technical developments make the stock an attractive buy candidate at current levels. We recommend going long in the price range of ₹110-112, targeting an upside of ₹132. To manage risk, a stop loss should be placed at ₹101 on a daily closing basis, ensuring protection against any further downside," said Patel.
The nearly three-month-long bearish phase in Bank of Baroda appears nearing its end, as a bullish pattern emerges on the daily chart.
The stock has formed a triple bottom structure in the ₹230- ₹235 zone, a strong reversal signal indicating that the downward trend may be exhausted.
A triple bottom pattern has developed near the 200-day exponential moving average (DEMA), adding further appeal to the stock.
Additionally, the daily RSI (Relative Strength Index) has broken through a bearish trendline along with bull divergence, signalling a shift in momentum towards the bullish side.
Despite a nearly 10 per cent decline from its recent swing high, Havells has maintained a higher highs and higher lows pattern, underscoring the sustained bullish trend.
This correction has brought prices closer to a falling trendline, which previously acted as a key resistance during upward movements.
Notably, the recent pullback occurred with declining trading volumes, signalling reduced participation from traders, which can be interpreted as a positive sign for price stability.
Key moving averages, such as the 55-day and 100-day EMAs, also remain below the current price levels, providing additional support and likely cushioning any further downside.
The current risk-reward ratio appears favourable, potentially attracting fresh buying interest from this level.
The share price of PNB Housing Finance has retraced nearly 61.8 per cent of the previous uptrend, finding support around the 55-day exponential moving average (EMA).
This level is poised to be a potential turning point, as the stock has demonstrated sustained relative strength. Additionally, prices are trading near a key horizontal support level on the daily chart, which previously served as the neckline resistance of a double-top formation.
Given the current market conditions, it is unlikely that prices will fall below the ₹890 level in the near term.
The broader sentiment remains bullish, and the recent corrective decline presents an opportunity to establish fresh, long positions.
Prices form a double bottom pattern on the weekly chart, indicating a potential trend reversal.
They are trading above the 55-week exponential moving average (EMA), a critical support level historically providing strong downside protection.
The broader trend remains positive, with a consistent pattern of higher highs and higher lows in the weekly timeframe.
The recent price decline was accompanied by diminishing trading volumes, signalling reduced selling pressure and the potential for bargain buying at current levels.
This pullback can be viewed as an opportunity to build fresh long positions, as the broader market sentiment remains bullish.
Zomato has shown a strong reversal from a rising trendline, accompanied by a significant increase in trading volume, indicating the potential for a bullish breakout.
"If the price closes above ₹280, it could target short-term levels of ₹310 and ₹320. On the downside, immediate support is at ₹270, providing a potential buying opportunity on dips. To manage risk effectively, a stop loss at ₹260 is recommended to safeguard against unexpected market reversals," said Bhojane.
The stock has recently shown a strong reversal from support on the daily chart, accompanied by a significant increase in trading volume, signalling a strong bullish trend.
"If the price closes above ₹1,250, it could reach short-term targets of ₹1,450 and ₹1,500. On the downside, immediate support is at ₹1,200, presenting a buying opportunity on dips. To manage risk effectively, a stop loss at ₹1,150 is recommended to protect against unexpected market reversals," said Bhojane.
Piramal Pharma is consolidating just below a falling trendline on the daily chart. This consolidation and a significant increase in trading volume suggest potential bullish momentum.
"A close above ₹230 could open the way for short-term targets of ₹255 and ₹260. On the downside, immediate support is at ₹225, presenting a buying opportunity on dips. To manage risk effectively, it's advisable to set a stop loss at ₹215 to protect against any 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.
