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Stock Analysis, IPO, Mutual Funds, Bonds & More

10 buy ideas from brokerages as market turns rangebound

RBI’s money policy review, rupee and oil price movements will be key market drivers this week

Updated: Oct 01, 2018, 01.31 PM IST
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While the outlook for the broader market remains uncertain, analysts see stock-specific opportunities across sectors.
NEW DELHI: Benchmark equity indices opened on a depressing note on Monday, amid weak signals from other Asian markets. Concerns over rising crude oil prices and uncertainty over RBI’s money policy outcome later this week weighed on investor sentiment.

RBI’s money policy review, some macroeconomic numbers, rupee and oil price movements will be among the key market drivers this week, which will be a truncated one owing to Tuesday’s Gandhi Jayanti holiday.

While the outlook for the broader market remains uncertain, analysts see stock-specific opportunities across sectors. Based on various brokerage recommendations, here are top 10 stocks that are expected to log gains over the next three weeks.

Nagaraj Shetti, technical research analyst, HDFC Securities

The Indian Hotels Company| Buy| Target price: Rs 151| Stop loss: Rs 128

As per weekly timeframe chart, The Indian Hotels has been moving in a larger consolidation pattern for last few months. Currently, the stock is holding on to its support at Rs 125, which led to a sustainable rise in price on multiple occasions in the past. The formation of long lower shadows in the last couple of weeks indicates the emergence of buying interest from the lows. The weekly 14-period RSI has turned up from near the 40 level, which suggests possibility that the upside momentum will pick up pack in the coming weeks. “One may look to buy Indian Hotels at the current market price of Rs 138 and add more on dips down to Rs 133. Hold it for an upside target of Rs 151 over next 3-5 weeks. Keep a stop loss at Rs 128,” Shetti said.

Cyient| Buy| Target price: Rs 825| Stop loss: Rs 705
On weekly timeframe, this IT stock has been moving up consistently forming higher lows over the past few months. After showing weakness recently, this stock saw a smart bounce last week and closed higher. Last week’s low could now be considered, as the new higher bottom of the sequence. According to this pattern, one may expect further bounce in the stock price in coming weeks. “The overall chart pattern is showing an opportunity to create long trading positions. Buying can be initiated in Cyient at the current market price of Rs 750. Add more on dips down to Rs 719 and hold for the upside target of Rs 825 in the next 3-5 weeks. Place a stop loss at Rs 705,” Shetti said.

Gaurav Ratnaparkhi, senior technical analyst, Sharekhan by BNP Paribas

Axis Bank| Buy| Target price: Rs 677| Stop loss: Rs 586
This stock clearly outperformed the bank index during the week gone by. The weekly chart shows the Axis Bank stock has taken support near its crucial weekly moving averages and has taken off from there on. The daily chart shows the stock has the potential to start the next upward move. In the last session, it formed a bullish outside bar on the daily chart. Thus, from here on, the stock is expected to march higher and can head to an all-time high of Rs 677.

Infosys| Buy| Target price: Rs 800| Stop loss: Rs 700

This stock has been rallying smartly in a multi-month rising channel. The recent correction found support near the junction of 40-day exponential moving average, the daily lower Bollinger Band and the lower channel line. Near these crucial parameters, the stock has formed a base for itself and is ready for the next leg up. In terms of bar patterns, the stock has formed a Popgun pattern on the daily chart, whose follow-through is expected on the upside.

Tata Global Beverages| Buy| Target price: Rs 255| Stop loss: Rs 227
This stock has been in the consolidation phase for last few sessions. Structurally, the consolidation looks mature now and the stock is expected to break out on the upside. The larger picture shows the stock has been falling in a channelised manner and has taken support near the lower channel line. From there, the stock has entered the pullback mode, subdividing it into lower degree waves. The daily momentum indicator is already in bullish mode, whereas the weekly momentum indicator has given a fresh buy signal.

Mazhar Mohammad, chief strategist for technical research & trading advisory,

Exide Industries| Buy| Target price: Rs 290| Stop loss: Rs 250

A strong recovery in last Wednesday’ session after retesting the panic low of Rs 254 registered on September 21 suggests that the bottom is in place for this stock at around Rs 254 mark. Positional traders can look to buy this stock at current price and on declines up to Rs 258 level and look for a target of Rs 290 over time. “As the market is in a volatile phase, traders are advised to maintain a bit wider stop around Rs 250 level,” Mohammad said.

ITC | Buy | Target price: Rs 316 | Stop loss: Rs 287

After positive closing in last two sessions, this counter is pointing to some sort of bottom formation around Rs 289 level despite the wild fluctuations. Traders can initiate fresh buying for a target of Rs 316, with a stop loss of Rs 287.

Vaishali Parekh, Senior Technical Analyst, Prabhudas Lilladher

HDFC Bank| Buy| Target price: Rs 2,150| Stop loss: Rs 1,950
This stock has witnessed a decent correction from the peak of Rs 2,211 and has now has bottomed out at around Rs 1,915. It has seen a revival, signifying strength and has the potential to rise further in the coming days. The RSI has indicated a trend reversal from the oversold zone and has given a buy signal. “With consistent volume participation witnessed and the chart looking attractive, we recommend a buy on this stock for an upside target of Rs 2,150, keeping a stop loss at Rs 1,950,” Parekh said.

Jay Anand Thakkar, CMT -AVP - equity research, Anand Rathi Shares and Stock Brokers

Reliance Industries| Buy| Target price: Rs 1,320| Stop loss: Rs 1,230
This stock has seen a breakout from the falling channel formed in its Wave 4 on the daily as well as weekly charts. The wave retraced 38.2 per cent of the previous Wave 3. “The stock can be brought for a target price of Rs 1,320, keeping a stop loss of Rs 1,230,” Thakkar said.

Asian Paints| Buy| Target price: 1,385| Stop loss: Rs 1,259
This stock seems to have completed Wave B of consolidation after a Five Waves declining structure and now Wave C seems to have started. A minimum of 61.8 per cent retracement is expected of the entire fall, which comes to Rs 1,385. “One can buy this for a target price of Rs 1,385, keeping a stop loss at Rs 1,259,” Thakkar said.
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