Stocks to buy this week: Maruti, Tata Power, Power Grid among eight technical picks; do you own any?
Experts offer eight stocks to buy for the next 3-4 weeks, including Maruti Suzuki India, Sterlite Technologies, Greenpanel Industries, Tata Power Company, Orient Cement, Power Grid Corporation of India, Mahindra & Mahindra Financial Services, and CIE Automotive India.
Domestic equity benchmarks the Sensex and the Nifty fell about 2.5 per cent in August as concerns over the re-emergence of inflation, elevated interest rates for longer than expected period and weakening global economic growth dominated investor sentiment.
While the domestic macro is healthy, investors are also concerned about the valuation of the market. Experts point out that the smallcap segment of the market is at a premium valuation which is a risk for investors.
"In India, a large number of smallcaps, particularly the microcaps, are rising, mainly driven by market momentum. Many newbie investors are chasing such stocks for quick gains. Many of these stocks don’t have strong fundamentals and investment in these stocks can be very risky. At this juncture, long-term investors should prefer the safety of high-quality large-caps," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
As the short-term outlook of the domestic market is slightly hazy, experts suggest betting on stocks that are sound on technical and fundamental parameters. Based on the recommendations of several experts, here are eight technical calls that one can buy for the next three to four weeks. Take a look:
Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers
Maruti Suzuki India | Target price: ₹12,000 | Stop loss: ₹9,000
After consolidating for over five years, Maruti Suzuki finally managed to break out from the psychological hurdle of ₹10,000. The breakout was accompanied by humongous volumes and hence looked genuine.
"The theoretical long-term target for the breakout seems to be over ₹14,000 from here on. Thus, traders are advised to buy the stock in the range of ₹10,300 -10,000 with a stop loss of ₹9,000 on a closing basis for an upside target of ₹12,000," said Patel.
Sterlite Technologies | Target price: ₹185 | Stop loss: ₹155
For the last three months, this counter has been consolidating in the range of ₹145-155. Recently it gave a clean breakout from the said range and is currently placed at ₹167 level. Having said that, it has also cleared its downward-sloping trendline quite comfortably. The best part about this reversal is has bounced back from its monthly central pivot range which has acted as massive support.
"One can buy the stock in the zone of ₹165-168 for a target of ₹185 and the stop loss would be around ₹155 on a daily closing basis," said Patel.
Greenpanel Industries | Target price: ₹441 | Stop loss: ₹349
Greenpanel Industries has been consolidating between ₹310 and ₹350 for the last three months. Recently, it gave a breakout on a weekly scale. On the daily chart, it is trading above all major daily exponential moving averages, which looks lucrative. Even the weekly RSI has rebounded from 50 levels, thus hinting at further bullish bias.
"We advise traders to go long in the stock in the range of ₹380–382, with a stop loss of ₹349 and a target of ₹441," said Patel.
Gaurav Bissa, VP, InCred Equities
Tata Power Company | Target price: ₹300 | Stop loss: ₹245
Tata Power has been in a consolidation phase for the last two years and it has witnessed a fresh breakout on the weekly charts.
The stock has triggered a bullish ABC follow-through breakout on point and figure charts on the daily timeframe with cluster targets placed at ₹300 level. On the candlestick chart, the stock has seen a breakout in RSI which is now crossing 70 which is likely to give a strong push to the stock price.
The stock is comfortably trading above the Williams Alligator indicator which suggests the downside is likely to be restricted with a strong possibility of a fresh uptrend.
Maruti Suzuki India | Target price: ₹11,200 | Stop loss: ₹9,700
Maruti Suzuki has been in a 17-year ascending channel pattern on the monthly charts. The stock has been in consolidation since bouncing from the channel support in the year 2020. The stock is on the verge of a five-year breakout, which has been confirmed on a weekly close above the ₹9,900 level.
The pattern can push the stock towards the ₹11,200 level in the coming months based on the five-year falling trendline pattern breakout on the weekly charts. The price is expected to get a strong thrust from RSI once it gives a move above the 70 level, which will confirm a major breakout in RSI as well.
Orient Cement | Target price: ₹230 | Stop loss: ₹185
Orient Cement has been in a consistent uptrend for the last few months. The stock witnessed a falling trendline pattern on the weekly charts which pushed it towards the ₹200 level.
The stock then witnessed some profit booking which resulted in a retest of the breakout area and has since then bounced strongly.
The stock has now witnessed a multi-swing as well as a bullish flag breakout on the back of solid volumes which can push the stock towards fresh life high levels.
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher Pvt. Ltd
Power Grid Corporation of India | Target price: ₹275 | Stop loss: ₹240
The stock, after the short correction, has consolidated, taking support near the lower base of the channel pattern on the daily chart near ₹239 levels and 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 with immense upside potential visible.
Mahindra & Mahindra Financial Services | Target price: ₹335 | Stop loss: ₹288
The stock, after the correction, has recovered significantly, witnessing a short consolidation. It has again moved past the important 50EMA level of ₹297 indicating improvement in the bias. The RSI is well placed and after a short consolidation has again regained strength, indicating a further rise.
CIE Automotive India | Target price: ₹577 | Stop loss: ₹496
The stock witnessed a short correction and thereafter, with a higher bottom formation pattern seen on the daily chart, has indicated a pullback, improving the bias moving past the significant 50EMA level of ₹496. It is anticipated to rise further in the coming days.
The RSI is well placed, indicating strength and it has immense upside potential to carry on the momentum still further ahead.
"With the chart looking attractive, we suggest buying and accumulating the stock for an upside target of ₹577, keeping the stop loss at ₹496," said Parekh.
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 making any investment decisions.
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