Stocks to buy this week: Experts suggest these nine technical picks; do you own any?
5 min read 21 Aug 2023, 01:28 PM ISTEquity benchmarks Sensex and Nifty are down 2 per cent in August due to concerns over inflation, monetary tightening, and FPI selling. Technical calls include Lemon Tree Hotels, Max Financial Services, Britannia, Bajaj Auto and Voltas.
PremiumEquity benchmarks the Sensex and the Nifty are down about two per cent in August so far on renewed concerns over inflation, monetary tightening, rich valuation of the Indian market and some selling by foreign portfolio investors (FPIs) in the cash market amid rising dollar and bond yields.
The short-term outlook of the market is cautious and analysts expect the market to see some consolidation.
"The rally in global markets, driven by the US economy’s soft landing narrative, appears to be losing steam. The major headwinds for the markets now come from the rising dollar and bond yields," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"The FPI selling in the cash market in August so far is likely to continue, going forward. Since the developments in the US economy are the main influences on the market, all eyes will be on Fed Chief Powell’s speech at the Jackson Hole Symposium on Friday. Long-term investors can use market corrections to slowly accumulate high-quality growth stocks, particularly in banking, capital goods and automobiles," said Vijayakumar.
As the market sentiment is cautious at the current juncture, analysts recommend buying only quality stocks for the short term. Here are nine technical calls that one can buy for the next three-four weeks. Take a look:
Gaurav Bissa, VP, InCred Equities
Lemon Tree Hotels | Target price: ₹110 | Stop loss: ₹95
Lemon Tree has been consistently forming higher highs and higher lows on the weekly charts suggesting the stock has been in a strong uptrend.
The stock is exhibiting an interesting continuation pattern on the daily timeframe, wherein it witnesses a brief period of consolidation followed by a breakout which pushes the price higher. It then again witnesses a consolidation and a breakout. This has ensured momentum indicators don’t get heated up and the trend remains intact.
The stock has witnessed a bullish triangle breakout on daily charts with incremental volumes which can push it towards ₹110 levels.
Max Financial Services (MFSL) | Target price: ₹1,000 | Stop loss: ₹810
MFSL has been in a downtrend since July 2021 with constant formation of lower highs and lower lows on the weekly charts. The stock has recently crossed the previous swing high which suggests the stock is in the early stage of witnessing a trend reversal.
It has witnessed a breakout from descending channel pattern on weekly charts which can push the stock towards ₹1,000 level. RSI is currently trading at 68 levels and is likely to give a thrust to stock price once it crosses 70 levels.
KPR Mill | Target price: ₹750 | Stop loss: ₹630
KPR Mill has been one of the strongest midcap names with consistent outperformance in the last few quarters. However, the stock has been in a consolidation phase for the last few months.
The stock witnessed a small consolidation breakout above ₹630 level which pushed the price towards ₹680 level. After a retest of the consolidation breakout, the stock is making a fresh swing high which paves the way for an upside to ₹750 level. The stock has given a buy signal in the Ichimoku setup on the weekly charts which can result in the start of a fresh uptrend.
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher
Britannia Industries | Target price: ₹5,100 | Stop loss: ₹4,350
The stock has witnessed a decent erosion from the ₹5,200 level, retracing almost 78.60 per cent of the previous rally. It has shown signs of bottoming out near the significant 200 period daily MA (moving average) at ₹4,500 level, indicating a trend reversal.
The RSI is hovering near the highly oversold zone, indicating a trend reversal to signal a buy.
"With the chart looking very attractive, we suggest buying and accumulating this stock for an upside target of ₹5,100, keeping the stop loss of ₹4,350," said the analyst.
Bajaj Auto | Target price: ₹5,000 | Stop loss: ₹4,540
The stock has made a double bottom formation pattern on the daily chart with support taken near the ₹4,540 level. It has currently indicated a bullish candle pattern to improve the bias. The RSI after the slide has flattened out and indicated a trend reversal to signal a buy and is well placed with immense upside potential visible from here on.
"With the chart looking good, we suggest buying and accumulating this stock for an upside target of ₹5,000, keeping the stop loss of ₹4,540," said Parekh.
Power Grid Corporation | Target price: ₹270 | Stop loss: ₹232
The stock, after the short correction, has taken support near the lower base of the channel pattern on the daily chart near ₹239 level, showing signs of improvement in the bias. The RSI also is well placed after the short dip and has indicated a trend reversal to signal a buy.
Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers
Jubilant Pharmova | Target price: ₹550 | Stop loss: ₹375
After making the top of ₹925 in May 2021, it has nosedived, resulting in a 71 per cent cut in price. Between June 2022 - March 2023, it made a solid base near ₹300 level and reversed nicely from those levels.
Additionally, it has made a bullish bat pattern on a weekly scale along with bullish divergence i.e., the price was making lower lows and RSI was making higher lows.
"One can buy in the range of ₹430-440 with an upside target of ₹550 and the stop loss would be ₹375 on a daily close basis," said Patel.
Castrol India | Target price: ₹170 | Stop loss: ₹135
Castrol India has been consolidating in the range of ₹100- 150 for the nearly last three years approx. Recently it broke the range and sustained above ₹150 level. On the indicator front, the monthly MACD has given a bullish cross near the zero line so the bias would be bullish.
"One can buy Castrol in the range of ₹144-148 for an upside target of ₹170 and the stop loss would be ₹135 on a daily close basis," said Patel.
Voltas | Target price: ₹900 | Stop loss: ₹760
On a weekly scale, Voltas has formed a bullish AB=CD pattern near ₹775-800 levels. After reversing from the said range, it has taken out its previous weekly swing high of ₹830 level. Having said that, the weekly MACD has given a bullish cross near the zero line so the bias would be bullish.
"One can buy in the range of ₹807-810 with an upside target of ₹900 and the stop loss would be ₹760 on a daily closing basis," Patel said.
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Disclaimer: The views and recommendations above are those of individual analysts and broking companies, not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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