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Experts say avoid aggressive bets in indices, give 6 'buy' ideas for January series

For the coming week, analysts expect the Nifty to slowly and gradually head towards 14,150-14,200; whereas the key support zone is placed at 13,950 - 13,850 levels.

January 04, 2021 / 01:54 PM IST
 
 
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Indian market closed in the green in December, the third consecutive month in a row, rallying by about 8 percent. The January series started with long rollovers that suggest that investors will be better off following the trend and avoid going contra as long as Nifty holds crucial support levels.

Even though the index is trading near overbought levels, a marginal pullback could be on the cards, but the long-term trend is still intact.

FII flows, December quarter earnings from India Inc., as well as Markit Manufacturing PMI and Services PMI data will be key factors that will drive the trend for markets in the coming week.

Vaccine drive in various parts of the world, including India, is giving comfort to the bulls, along with relentless flows from foreign investors. FIIs were net buyers of more than Rs 48,000 crore in the cash segment of the Indian equity markets.

“Among the key events, earnings season starts next week with IT major, TCS results scheduled on January 8. On the economic front, participants will be eyeing the Markit Manufacturing PMI and Services PMI data on January 4 and January 6 respectively,” Ajit Mishra, VP - Research, Religare Broking Ltd told Moneycontrol.

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“The overwhelming foreign fund inflow combined with the favourable signals from the economic front is helping the markets to inch higher. Having said that, the movement in the benchmark lacked decisiveness last week and we may see some profit-taking or consolidation ahead,” he said.

"Market is likely to give some corrections in between, which would be a healthy sign. For the coming week, we expect the Nifty to slowly and gradually head towards 14,150-14,200; whereas the key support zone is placed at 13,950 - 13,850 levels," Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking told Moneycontrol.

"This week, although there was some muted action seen in key indices, the broader market just took off in the last couple of days. Hence, the real action lies in the broader end of the spectrum, which may continue to provide better trading opportunities," he said.

Chavan further added that traders are advised to keep focusing on thematic bets and should ideally avoid aggressive bets in indices.

Here is a list of 6 stocks from various experts that can be bought in the January series:

Expert: Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking

Tinplate Company of India | LTP: Rs 167.25 | Target price: Rs 192 | Stop loss: Rs 150 | Upside: 15%

This ‘Tata’ group company has been quiet for the last three months after a spectacular move from March lows.

On Friday, the buying momentum accelerated in the stock in the latter half, which resulted in a strong breakout from multiple hurdles.

The volumes in this move were phenomenal, nearly six times its average daily volumes, providing credence to the move.

With this, the weekly and monthly timeframe charts look extremely promising and hence, we recommend going long on a decline towards Rs 162 for a target of Rs 192 in the coming days.

Expert: Shabbir Kayyumi is the Head of Technical Research at Narnolia Financial Advisors Ltd

Bharat Heavy Electricals: Buy Around Rs 37.50 | Target: Rs 56 | Stop Loss: Rs 31 | Upside: 50%| Time over 1 month

The stock has maintained strong support near the Rs 31-32 zone and current sustainability above all significant averages has improved the bias. It has also formed a positive candle formation on the daily chart with higher highs-lows from three consecutive days.

The RSI also has indicated a trend reversal signal a buy. With the chart looking attractive, we suggest buying this stock around Rs 37.50 for a target of Rs 56, while keeping the stop loss of Rs 31.

Mahindra & Mahindra: Buy Around Rs 730 | Target: Rs 960 | Stop Loss: Rs 640 | Upside: 31%| Time over 1 month

This counter appears to have registered a clean break out of the consolidation zone on the daily chart. A strong bull candle with decent volume is showing more upside moves in the coming sessions.

If the stock closes above Rs 750 levels, it should eventually head higher towards its initial range breakout target of Rs 960.

For the time being, positional traders are advised to buy around Rs 740 into this counter for a target of Rs 960, with a stop below Rs 640 on a closing basis.

Indus Towers: Buy Around Rs 235 | Target: Rs 290 | Stop Loss: Rs 209 | Upside: 23 percent| Time over 1 month

The scrip spurted from a low of Rs 224 and formed a Hammer candlestick pattern, it has shown pullback on the upside and marked the high of Rs 237 mark then after it is been consolidating at higher levels.

Currently, it is waiting for the breakout on the upside so that it can accelerate buying momentum further. The emerging line of polarity on the daily time frame is suggesting bullish momentum in the scrip.

Indicator and oscillator are also showing conducive scenario in the coming sessions. So, based on the mentioned technical structure one can go long in the scrip around Rs 235 for the target of Rs 290 mark with a stop loss of Rs 209 mark.

Brokerage: SMC Global Securities Ltd

Piramal Enterprises Limited (PEL): Buy| LTP: Rs 1480| Target: Rs 1600| Stop Loss: Rs 1390| Upside 8%| Time 1-2 Months

The stock closed at Rs 1480.35 on 01st January 2021. It made a 52-week low at Rs 606.85 on 24th March 2020 and a 52-week high of Rs. 1727.95 on 29th January 2020.

The 200-day Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1373.76.

The short-term, medium-term, and long-term bias are looking positive for the stock as it is trading in an upward moving channel. Apart from this, the stock has formed a “Symmetrical Triangle” on weekly charts and has closed on verge of the breakout of pattern with high volumes.

Moreover, the technical indicators such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of 1455-1465 levels for the upside target of 1570-1600 levels with a stop loss below 1390.

Shriram Transport Finance Company: Buy| LTP: Rs 1070| Target: Rs 1200| Stop Loss: Rs 1010| Upside 12%| Time 1-2 Months

The stock closed at Rs 1070.85 on 01st January 2021. It made a 52-week low of Rs 431.37 on 23rd March 2020, and a 52-week high of Rs. 1340.20 on 24th February 2020. The 200-Day Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 830.51.

As we can see on the charts, the stock is trading in higher highs and higher lows on charts which is bullish in nature.

Apart from this, it is forming a “Bull Flag” pattern on the weekly chart, which is a continuation pattern, that indicates further upside.

Last week, the stock closed on the verge of the breakout of the pattern along with volumes so buying momentum is expected from current levels.

Therefore, one can buy in the range of 1055-1060 levels for the upside target of 1180-1200 levels with a stop loss below 1010.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand is the Editor Markets at Moneycontrol.

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