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IGL, Infosys, Kaveri Seeds, BEML among 8 stocks that analysts say can deliver gains in 2-3 weeks

How to trade in such a market? Be cautious and remain stock-specific, say analysts.

, ETMarkets.com|
Updated: Jul 22, 2019, 10.51 AM IST
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NEW DELHI: There was no relief for domestic equities on Monday, as frontline indices Sensex and Nifty lurched lower sharply amid a major selloff in morning trade.

Overseas foreign investors’ money continued to exit the market after the Union Finance Minister clarified that the newly-imposed income-tax surcharge in the higher income bracket is here to stay.

Uninspiring quarterly numbers, weak global cues, rising crude oil prices, a geopolitical flareup in West Asia and rupee's weakness further deteriorated investor sentiment.

How to trade in such a market? Be cautious and remain stock-specific, say analysts.

Based on recommendations from various analysts and brokerages, here are eight stocks that the analysts said should log some gains over the next two to three weeks.

Subash Gangadharan, Senior Technical & Derivatives Analyst, HDFC securities

Indraprastha Gas (IGL) | Buy | Target price: Rs 350 | Stop loss: Rs 310

IGL has shown a lot of relative strength in past two weeks. While the market has been in correction mode, IGL shares have rallied smartly from the lows of Rs 295 to gain almost 10 per cent in last two weeks. Technical indicators, too, are giving positive signals as the recent rally in the stock has led it to close above the 13-day and 50-day SMAs. The 14-day RSI is in rising mode and not overbought. The Relative Strength indicator also is in an uptrend, indicating that the stock is set to outperform Nifty.

Just Dial | Buy | Target price: Rs 860 | Stop loss: Rs 750

This stock has been consolidating in the Rs 743-796 range for the past several weeks. This week, it bounced back from the lower end of the trading range on healthy volumes, despite weakness in the broader market. In the process, the stock has closed above the 13-day SMA. The 14-day RSI, too, has bounced back and cut its nine-day EMA from below, which is a positive signal.

Rajesh Bhosale, Technical Analyst, Angel Broking

Gujarat State Petronet | Buy | Target price: Rs 230 | Stop loss: Rs 190

In spite of the recent carnage in midcaps, this stock has shown a comparative outperformance. On the weekly chart, the stock has finally broken above the hurdle after facing resistance around the Rs 200 mark for more than six times in last three months, thus confirming a bullish reversal ‘Inverse Head N Shoulder’ pattern. The said breakout was supported by an increase in volume. In addition, momentum oscillator RSI is placed in the positive zone supporting the ‘buy’ call. The stock price is well above major moving averages such as 50-DSMA and 200-DSMA, indicating overall bullishness on the counter. “Since there is weakness in the broader market, we recommend buying this stock on dips at Rs 204 for a target of Rs 230 over the next 14 sessions. The stop loss should be fixed at Rs 190,” said Bhosale.

Infosys | Buy | Target price: Rs 830 | Stop loss: Rs 740

Market participants have given a thumbs up to its better-than-expected quarterly earnings. As a result, the prices have witnessed a gap-up opening and the optimism got extended last week. On the weekly chart, the stock has been gyrating in the Rs 760-690 range for past four months and the prices have since broken above the higher range, confirming a breakout of the rectangular channel pattern. The said breakout is supported by a gap termed as ‘Breakaway Gap’ and with a good increase in volume. Momentum oscillator RSI is in the overbought zone. However, the structure seems to be placed positively. “We recommend buying this stock on dips to Rs 770 for a target of Rs 830 over the next 14 sessions. The stop loss should be fixed at Rs 740," said Bhosale.

Mustafa Nadeem, CEO, Epic Research

Kaveri Seed Company | Buy | Target price: Rs 480 | Stop loss: Rs 415

This stock has bounced back from an important support placed around Rs 433 and has closed above its last four-days’ close, making it a reversal pattern. The stock has also closed above its Head and Shoulder neckline, after giving a false breakdown, indicating buying at lower levels. Volume has been much higher compared with the average volume in July and almost thrice of its last three-day average. “We believe Kaveri Seed can see a short-term bounce till Rs 480. Have a stop loss at Rs 415,” said Nadeem.

Engineers India | Buy | Target price: Rs 115 | Stop loss: Rs 101

This stock has formed a double bottom on the daily chart with a Harami pattern. With that, there is a positive divergence on the charts with the stock making lower lows and the RSI moving higher sustaining the previous lows. “This can result in buying at lower levels and prices can move to a higher target of Rs 115,” Nadeem said.

Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in

BEML | Buy | Target price: Rs 1,017 | Stop loss: Rs 890

After the recent breakout of price and volume, this counter appears to be in a minor consolidation mode of 50 points since last six sessions and it looks ripe for a fresh breakout above this range as it almost remained indifferent to the broader selloff witnessed in the market. “Positional traders should go long with a stop below Rs 890 on a closing basis and look for a target of Rs 1,017,” said Mohammad.

Kaveri Seed Company | Buy | Target price: Rs 480 | Stop loss: Rs 410

This counter strongly recoiled in the last session on relatively higher volumes without violating its corrective swing low of Rs 412, hinting that a fresh short-term upswing might be in progress. In such a scenario, the correction which is in progress from the highs of Rs 559–412 may get at least briefly arrested, paving the way for a pullback which can test its interim top placed at Rs 482. “Positional traders are advised to create fresh longs by adopting a two-pronged strategy of buying now and on declines close to Rs 420 and look for a target of Rs 480,” Mohammad said

SMC Global Securities

Power Grid Corporation of India | Buy | Target price: Rs 220-225 | Stop loss: Rs 190

The 200-day exponential moving average (DEMA) of the stock on the daily chart is currently placed at Rs 194.13. The stock is in the consolidation zone but holds its higher levels, trading in high highs and lows. Apart from this, it has formed an Inverted Head and Shoulder pattern on the weekly charts and seen a breakout of the same while trading higher. “This shows that the buying momentum can continue in the coming days. One can buy the stock in the Rs 200-204 range for an upside target at Rs 220-225 levels with a stop loss below Rs 190,” the brokerage said.

(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)
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