Chartist Talks: Sudeep Shah's top 4 stock picks for next week amid market turmoil

Sudeep Shah is the Head of Technical and Derivative Research at SBI Securities

Sudeep Shah of SBI Securities is bullish on Uno Minda, and Vijaya Diagnostic Centre. "Uno Minda is on the verge of giving horizontal trendline breakout on a daily scale, and currently, it is trading above its short and long-term moving averages," he said in an interview with Moneycontrol.

Despite the correction in the frontline indices, Vijaya Diagnostic is trading at an all-time high, all the moving averages and momentum-based indicators are suggesting strong bullish momentum in the stock, he believes.

Further, he is also bullish on Marico, and Bajaj Finserv. "Both are strongly outperforming the frontline indices and are also likely to maintain outperformance in the short term," said the Head of Technical and Derivative Research at SBI Securities.

Do you see any possibility of Nifty as well as Bank Nifty testing the low of June 4 (i.e. Lok Sabha election results day)?

After two weeks of consolidation, the benchmark index Nifty has resumed its downward trajectory, shedding over 2% in the past week and closing below the crucial 23,500 mark. This decline has resulted in the formation of a sizeable bearish candle on the weekly chart. Notably, for the last three trading sessions, the index has been trading below its 200-day EMA, a critical long-term support level, which adds to the bearish undertone and raises concerns about further downside risks.

Most notably, the past week saw significant corrections in the Nifty Midcap and Nifty Small Cap indices, which plummeted by 5.77% and 7.29%, respectively. This sharp decline highlights broad-based selling pressure across the market, signalling caution among participants beyond the frontline indices. These indices slipped below their 200-day EMA for the first time after April 2023.

We believe the prior swing low zone of 23,260-23,200 will act as crucial support for the index. If the index slips below the level of 23,200, then we may witness further correction in the index up to the 22,800 level. On the upside, the 200-day EMA zone of 23,670-23,700 will act as a crucial hurdle for the index.

On Thursday, TCS officially kicked off the Q3 earnings season, setting the stage for what could be a defining period for the markets. With investors closely monitoring corporate performance amid global and domestic challenges, these results are likely to play a pivotal role in shaping market sentiment. As the earnings unfold, the focus will remain on growth trajectories, margin pressures, and management outlooks, making this season a potential make-or-break moment for market direction.

Do you believe the higher highs-higher lows formation will continue in the Nifty IT index?

Yes, Nifty IT is currently outperforming the frontline indices. Recently, it formed an Adam & Adam Double Bottom pattern on the daily chart and confirmed a neckline breakout on Friday. Furthermore, it is trading above both its short and long-term moving averages, with the daily RSI (Relative Strength Index) approaching the key 60 levels. These technical indicators suggest that the Nifty IT index is poised to maintain its upward trajectory in the coming sessions.

What are your top 2 bets for the next week?

Uno Minda

The stock is on the verge of giving a horizontal trendline breakout on a daily scale. Currently, it is trading above its short and long-term moving averages. These averages are on a rising trajectory, and they are in the desired sequence. Further, the daily RSI is quoting above 60, and it is in rising mode, which is a bullish sign. Hence, we recommend accumulating the stock in the zone of Rs 1,100-1,090 level with a stop-loss of Rs 1,060 level. On the upside, it is likely to test the level of Rs 1,150, followed by Rs 1,170 in the short term.

Vijaya Diagnostic Centre

Despite the correction in the frontline indices, the stock is trading at an all-time high, which indicates strong outperformance. The stock is moving higher along with the robust volume. Further, as the stock is trading at an all-time high, all the moving averages and momentum-based indicators are suggesting strong bullish momentum in the stock. Hence, we recommend accumulating the stock in the zone of Rs 1,245-1,235 level with a stop-loss of Rs 1,190 level. On the upside, it is likely to test the level of Rs 1,320, followed by Rs 1,350 in the short term.

Is the Kalyan Jewellers looking oversold?

No, Kalyan Jewelers has faced a sharp correction of over 21% after marking a high of Rs 795.40 in just six trading sessions. During this decline, the stock slipped below its 20, 50, and 100-day EMA levels. The daily RSI is currently at 28.48, indicating there could still be room for further downside. However, the 200-day EMA zone of Rs 596-Rs 590 is expected to act as a support level in the short term.

Are you bullish on Marico?

Yes, the stock is strongly outperforming the frontline indices. The ratio chart of the stock as compared to the Nifty index has given a consolidation breakout, which shows strong outperformance. Also, the stock is outshining the Nifty FMCG index by a decent margin. Further, it is trading above its short and long-term moving averages. The daily RSI is in bullish territory.

Hence, we recommend accumulating the stock in the zone of Rs 680-670 level with a stop-loss of Rs 650 level. On the upside, it is likely to test the level of Rs Rs 710, followed by Rs 730 in the short term.

Are the charts signalling a strong buy on Bajaj Finserv?

Yes, recently, the stock has given a neckline breakout of a double bottom pattern along with the robust volume. Thereafter, since the last six trading sessions, the stock has been oscillating in a narrow range, and it is strongly outperforming the frontline indices. The daily RSI is taking support near the 60 zone, which is a bullish sign as per RSI range shift rules. Hence, we believe the stock is likely to outperform in the short term.