Experts expect the benchmarks to sustain gains. However, as the Lok Sabha election result day draws closer, there could be short-term volatility.
According to Ajit Mishra, SVP of research at Religare Broking, the market’s buoyancy over the last two weeks has countered the previously bearish sentiment. The Nifty is expected to move toward the 23,150-23,400 range soon.
“In the event of a dip, the 22,550-22,800 zone is expected to provide strong support. While all key sectors are contributing to the rally, banking and IT still have significant upside potential, and their participation could drive the index to much higher levels. We recommend continuing a stock-specific trading approach, favouring large and mid-cap stocks for short-term trades,” said Mishra.
Even as the market is at a record high level, experts say some stocks look attractive on the technical charts, and one can consider buying them for short-term gains. Based on analysts’ recommendations, the below nine stocks may give double-digit returns in the short term. Take a look:
Analyst: Riyank Arora, Technical Analyst at Mehta Equities
Tata Motors | LTP: ₹960.55 | Target price: ₹1,200 | Stop loss: ₹909 | Upside potential: 25%
Arora pointed out that the Tata Motors stock has taken strong support at the ₹920 mark and bounced strongly from those levels, indicating a potential double-bottom reversal pattern on its daily charts.
With the RSI (14) near 46 and witnessing a minor uptick from lower levels of 35, the stock is indicating good signs of momentum and strength and looks poised for price targets of ₹1,200 and above from a short-term perspective. However, a strict stop loss should be kept at ₹900 mark to manage risk well, said Arora.
Tata Consumer Products | LTP: ₹1,098.25 | Target price: ₹1,300 | Stop loss: ₹1,050 | Upside potential: 18%
The stock has given a strong breakout above its trendline resistance mark of ₹1,115 and successfully closed above the same, Arora observed.
“With the stock witnessing a minor uptick in its RSI (14), rising from 37 to 53, the overall momentum looks strong. The stock also seems to be forming a strong base at the ₹1,056 mark,” said Arora.
“A strict stop loss should be kept at ₹1,050 mark to manage risk well and we can chase potential targets of ₹1,300 and above on the upside for Tata Consumer,” Arora said.
Analyst: Mandar Bhojane, Equity Research Analyst, Choice Broking
Larsen & Toubro | LTP: ₹3,625.90 | Target price: ₹4,000 | Stop loss: ₹3,400 | Upside potential: 10%
Larsen & Toubro (L&T) is trading near ₹3,600, exhibiting a strong reversal from the bottom level.
The price action has formed a bullish engulfing pattern with substantial volume, signalling a bullish reversal following a correction from the top.
Bhojane said L&T could achieve a target price of ₹3,800 and ₹4,000 in the near term, making it advisable to consider purchasing on dips, particularly around ₹3,490.
Additionally, Bhojane pointed out that L&T is positioned above key exponential moving averages (EMAs), including the 100-day and 200-day EMAs. This alignment above these crucial EMAs enhances the bullish outlook, suggesting the possibility of a sustained upward price movement.
“To effectively manage risk, it is recommended that you implement a stop loss at ₹3,400. This precautionary measure is crucial to safeguarding your investment in an unexpected market reversal,” said Bhojane.
Analyst: Vijay Laxmi A Ambala, SEBI registered independent research analyst
PNB Housing Finance | LTP: ₹796.45 | Target price: ₹900 | Stop loss: ₹742 | Upside potential: 13%
The stock trades above its key moving averages – the 20, 50, and 200-day EMAs.
Housing demand is likely to increase in the upcoming year, and companies with good financial conditions will have better choices to capitalise on this trend.
This stock could benefit from increased demand in the housing finance sector, which could be driven by favourable government policies during election periods.
“PNB Housing Finance is one of them and is a good buy at a range of ₹770 to ₹800, with a target price between ₹830 and ₹900. The stop loss is set at ₹742. The holding period ranges from 15 to 60 days,” said Ambala.
Atul | LTP: ₹5,880.20 | Target price: ₹6,650 | Stop loss: ₹5,760 | Upside potential: 13%
This speciality chemicals company could see growth due to its strong market position and potential boosts in industrial demand linked to election-related economic activities.
With an RSI of 40 on the weekly time frame and 46 on the daily time frame, Atul is trading in a small range.
Recently, it experienced a breakdown of the bearish “flag and pole” chart pattern. Now, it is better to wait for a breakout.
“It is better to buy the stock at ₹6,050, with a target of ₹6,250 to ₹6,650 and a stop loss of ₹5,760. The holding period ranges from 20 to 90 days,” Ambala said.
Samvardhana Motherson International | LTP: ₹140.15 | Target price: ₹160 | Stop loss: ₹128 | Upside potential: 14%
The volume pattern looks moderate; however, the price has recently broken out of its consolidation range.
This breakout is likely to be sustained. At current price points, a swing opportunity with low risk could be seen.
“Motherson Sumi is a buy at ₹137, targeting between ₹145 and ₹160, with a stop-loss of ₹128. The holding period is between 15 to 50 days,” said Ambala.
Given its strong automotive parts manufacturing portfolio, the company might see increased investor interest during election seasons, which often emphasise industrial growth and infrastructure development.
Ramco Industries | LTP: ₹237.05 | Target price: ₹320 | Stop loss: ₹220 | Upside potential: 35%
The company’s involvement in the construction materials sector makes it a potentially strong performer during election periods, which often focus on infrastructure projects.
The RSI is in the overbought zone, at 70 on the daily and 62 on the weekly timeframe.
However, the price chart suggests a range breakout as it is trading above its key moving averages.
“Ramco Industries is recommended for purchase at ₹240 to ₹247, with a target price range of ₹270 to ₹320 and a stop loss at ₹220. The holding period ranges from 15 to 40 days,” said Ambala.
Saurashtra Cement | LTP: ₹124 | Target price: ₹150 | Stop loss: ₹115 | Upside potential: 21%
This stock could benefit from increased construction activity and infrastructure projects often promised and initiated during election times, driving demand for cement.
Saurashtra Cement delivered a 101 per cent return within one year and is now getting ready for a breakout on the daily timeframe.
With a small stop loss, a high reward is possible.
“The price is looking moderate in the buying zone as per the daily time frame RSI, which is 58. Additionally, it is taking support above its 20-day SMA. It is a buy at ₹120 to ₹123, with a target range of ₹128 to ₹150 and a stop loss of ₹115. The holding period is between 10 to 40 days,” said Ambala.
Latent View Analytics | LTP: ₹488.55 | Target price: ₹600 | Stop loss: ₹470 | Upside potential: 23%
Latent View Analytics Ltd is an India-based data and analytics company. The company helps businesses drive digital transformation by combining digital and traditional data.
Latent View is looking ready for a breakout as it is trading above its 20, 50, and 200-day SMAs. It delivered a 52 per cent return within one year.
“It looks good to buy at ₹495 to ₹500, with a target range of ₹530 to ₹600 and a stop-loss of ₹470. The holding period is between 10 to 40 days,” said Ambala.
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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.
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Published: 26 May 2024, 11:06 AM IST