NEW DELHI: Fear of US recession came back to haunt financial markets on Monday after a historical trend of inverted yield curve resurfaced last Friday.
This coupled with repeated weak macroeconomic data has strengthened the fear that all is not well with the global economy and India, being among the most prominent emerging markets, cannot shrug off the heat.
A 380-point fall in the Sensex came on the back of a wave of selloff across sectors.
Besides global cues, rupee weakness has also contributed to the fall in stocks. Analysts said investors should adopt a prudent, stock-specific approach in such a market.
Based on various brokerage recommendations, here is a list of 10 stocks that can potentially deliver solid gains over the next 2-3 weeks.
Rajesh Bhosale, Technical Analyst, Angel Broking
Heidelbergcement India | Buy | Target price: Rs 192 | Stop loss: Rs 167
This stock recently witnessed a sharp upsurge from Rs 145 level to Rs 184 and which was shadowed by profit booking that pushed prices back towards Rs 170 level with low volumes. At this juncture, the stock is showing much resilience after forming a Japanese candlestick pattern, which resembles a bullish engulfing pattern. Volume analysis indicated low volume during the down move, whereas high volume during the upmove suggests accumulation on the counter. In addition, momentum oscillator RSI seems to have formed a base around the 65 mark on the daily chart and has seen a fresh bullish crossover with its smoothened moving average.
Infosys | Buy | Target price: Rs 804 | Stop loss: Rs 707
During the recent market rally, this stock and its peers lacked participation. Some technical indicators are hinting at an end to its slumber phase and a period of outperformance in the near term. On the daily chart, the stock has confirmed a Falling Channel bullish breakout, supported by a bullish breakaway gap. The recent bounce from lower levels was accompanied by increasing volume, indicating a bottom out and signs of optimism. The momentum oscillator has crossed above the positive zone at 50, supporting the buy call.
Aditya Agarwala, Senior Manager- technical analysis, YES Securities
Teamlease Services | Buy | Target price: Rs 3,200-3,350 | Stop loss: Rs 2,800
On the weekly chart, this stock is on the verge of a breakout from the channel pattern, indicating bullishness. Further, on the daily chart, it is on the verge of a breakout from a W pattern neckline placed at Rs 3,010. A sustained trade above this neckline can extend the upward move to Rs 3,200-3,350 levels. The RSI has also turned upward after taking support at the lower end of the bull zone i.e. 40-level. It has formed a positive trend reversal on the daily chart, suggesting bullishness on the counter.
Asian Paints | Buy | Target price: Rs 1,520-1,570 | Stop loss: Rs 1,420
On the weekly chart, Asian Paints is on the verge of a breakout of an ascending triangle pattern neckline. Moreover, it has turned up after taking support at the 61.8 per cent Fibonacci retracement. The RSI has turned upward after forming a positive divergence, affirming bullishness.
Vaishali Parekh, Senior Technical Analyst at Prabhudas Lilladher
Castrol India | Buy | Target price: Rs 180 | Stop loss: Rs 154
This stock has formed a higher bottom pattern on the daily chart, taking support at the significant 200-DMA and has also moved past the 50-DMA to signify strength. It has improved the bias for further upward movement in the coming days. The RSI has also indicated a trend reversal to give a buy signal. “With good volume participation, we recommend a buy rating on this stock for an upside target of Rs 180, keeping a stop loss of Rs 154,” Parekh said.
Astral Poly Technik | Buy | Target price: Rs 1,300 | Stop loss: Rs 1,080
This stock has been in an upward trending mode and with a slight correction witnessed in recent times, the chart looks attractive for further upward momentum in the coming days. The indicators are all favourable and with the RSI showing a trend reversal, the bias is maintained positive.
Kkunal Parar, Senior Technical Research Analyst, Choice Broking
CanFin Homes | Buy | Target price: Rs 347-355 | Stop loss: Rs 308
On the daily chart, this stock has been trading above its upper band of slightly higher top higher bottom formation with above-average volume, which indicates a robust upside movement in the counter. On the weekly chart, the stock has started to trade above its 50-week moving average placed at Rs 309.40, which shows a positive trend in the counter.
SRF | Buy | Target price: Rs 2,610-2,665 | Stop loss: Rs 2,350
On the weekly chart, this stock has seen a breakout of its downward falling trend line, which indicates a robust upside movement in the counter. On the hourly chart, the stock has been trading with strong support of 21- and 50-hourly moving average, which suggests an uptrend for the time being. Moreover, the stock has been trading in an upward rising channel formation since last many days which is a continuation formation and suggests a further upside movement.
Mustafa Nadeem, CEO, Epic Research
Infosys | Buy | Target price: Read More