BackStocks to Buy: Kotak Bank, TCS, Tata Motors among nine stocks analysts recommend buying for short term; take a look
The long-term outlook of the domestic market is bullish but the market may remain volatile in the short term due to the prevailing headwinds.
PremiumThe domestic market benchmarks the Sensex and the Nifty have been in the green since March this year, on a monthly basis, thanks to in-line March quarter numbers of India Inc., foreign capital inflow, signs of an end of aggressive rate hikes and India's healthy economic outlook.
Analysts point out that the undertone of the market is positive and after the end of the short-term concern over the debt ceiling crisis in the US, the market may move to hit its fresh all-time high.
It appears to be a time to pick quality stocks for the long term. However, keeping in mind that the market may remain volatile in the short term, one should bet on stocks that are not only fundamentally sound but also have strong technical structures.
Analysts recommended the following nine stocks to bet on for the next three to four weeks as their technical indicators indicate they are poised for gains in the shoer term.
Sumeet Bagadia, Executive Director, Choice Broking
Mahindra and Mahindra (M&M) | Target price: ₹1,325 | Stop loss: ₹1,220
The stock has formed a hammer pattern on the daily chart which indicates the reversal of the bearish trend in the stock.
Strength is shown by the RSI indicator's current trading range of 58 levels. The stock is currently trading above all of the key moving averages.
The Bollinger band continues to expand on the daily chart, with the price trading above the band's centre line, indicating the stock's strength.
A small resistance is placed near ₹1,285 level; if it surpasses this level, it may move towards ₹1,325 level and higher.
"With a medium-term target price of ₹1,325, we advise purchasing M&M at the current market price of ₹1,260. It can also be accumulated close to ₹1,240 levels. If the price closes below ₹1,220, our analysis will become invalid," said Bagadia.
Kotak Mahindra Bank | Target price: ₹2,040–2,050 | Stop loss: ₹1,895
The price has been consolidating and building a firm base in the ₹1,910–1,920 zone on the weekly chart. The short-term support is further confirmed by the stock's current price, which is above 21 simple moving averages (SMA).
On the hourly chart, it is also moving in a higher-high-higher-low pattern. The daily period RSI plot is still at a level of 60. On a daily chart, the Bollinger Band has begun to widen.
"One can start a long position at the current market price based on the technical framework described above. To be on the safe side, it would be better to enter the ₹1,920–1,925 level range. Closing and sustaining above ₹1,960 will lead prices in the following days towards ₹2,040–2,050 levels. Stop loss may remain at ₹1,895," said the analyst.
TCS | Target price: ₹3,340 | Stop loss: ₹3,150
Tata Consultancy Services (TCS), after experiencing a month-long rally from its low of ₹3,071.50 to the high of ₹3,309.70, has recently retraced.
The chart suggests that TCS has established a strong support level in the range of ₹3,180-3,200. This indicates that the stock has found considerable buying interest around these levels, providing a potential foundation for further upward movement.
The Relative Strength Index (RSI) for TCS is currently at 49, indicating that there is still room for potential upside.
"Considering the technical factors and market conditions, it appears to be a favourable opportunity to buy TCS at dips until it reaches the ₹3,000 level. The target for this trade would be ₹3,340, with a recommended stop loss set at ₹3,150," said the analyst.
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Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers
Firstsource Solutions (FSL) | Buying range: ₹125-135 | Target price: ₹155 | Stop loss: ₹114
For the last one year, this counter has been consolidating in the range of ₹100-120 approximately. Recently, it gave a clean breakout along with heavy volume which hints towards further upside in the counter.
Additionally, on a weekly scale, MACD is displaying a bullish crossover exactly above the zero line which is a sign of further bullish momentum.
Amara Raja Batteries | Buying range: ₹635-640 | Target price: ₹690 | Stop loss: ₹615
Recently, this counter has given a breakout from its previous weekly trading range of ₹550-620 and is currently well placed above it.
On the indicator front, the price action is well above William Alligator (trend-following indicator) while the weekly MACD is displaying a bullish crossover exactly above the zero line which is a sign of further bullish momentum.
"One can buy this stock in the range of ₹635-640 with an upside target of ₹690 and stop loss would be ₹615 on a daily close basis," said the analyst.
Jubilant Pharmova | Buying range: ₹340-350 | Target price: ₹430 | Stop loss: ₹310
After making the top ₹925 in May 2021, it nosedived, resulting in a 71 per cent cut in price. Between June 2022 to March 2023, it made a solid base near ₹300 levels and has reversed nicely from those levels.
Additionally, it has made a bullish bat pattern on a weekly scale along with bullish divergence i.e. price was making lower lows and MACD was making higher lows.
"One can buy this stock in the range of ₹340-350 with an upside target of ₹430, keeping a stop loss of ₹310 on a daily close basis," said the analyst.
Read: Day trading guide for today: Six buy or sell stocks for Monday - May 22
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher
Tata Motors | Target price: ₹575 | Stop loss: ₹504
The stock has given a decent rally in the past one and a half month scaling the peak level of ₹537 and thereafter witnessing a short correction to halt near the rupee ₹500 level, forming a higher bottom pattern on the daily chart. The RSI indicator has indicated a reversal making the chart look attractive and has signalled a buy.
"With the stock overall in a rising trend, we anticipate another upward move in the coming days. We suggest buying and accumulating this stock for an upside target of ₹575 level, keeping the stop loss at ₹504," said the analyst.
Shree Renuka Sugars | Target price: ₹54 | Stop loss: ₹41
The stock after the recent slide has consolidated near the 43 level and currently, with a positive candle pattern, it has shown improvement and is expected to see further rise in the coming days. The RSI has indicated a trend reversal from the oversold zone, signalling a buy.
"The stock has much upside potential. With the chart looking attractive, we recommend buying this stock for an upside target of ₹54, keeping the stop loss of ₹41," said the analyst.
Nava | Target price: ₹280 | Stop loss: ₹225
The stock has indicated a strong support near ₹220 levels where it has shown trend reversal on three occasions. Currently, it has shown a significant pullback from the support zone, improving the bias after moving past the important 50EMA (exponential moving average) level of ₹235 and a further rise to ₹280 is anticipated.
The RSI has indicated a trend reversal from the oversold zone and it is currently in a strong position with strength indicated.
"With the chart looking good, moving in an ascending channel pattern, we recommend buying this stock for an upside target of ₹280 keeping a stop loss of ₹225," said the analyst.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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