Looking for momentum plays? Top three stocks which could give 15-23% return in 6 months

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26 Aug, 2025 12:21

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Dharmesh ShahICICI Direct.com Research

Equity benchmarks snapped their eight week’s winning streak as it witnessed profit booking amid concerns over a sharp depreciation in the rupee. Key observation since the beginning of 2018, each directional leg in the Nifty has lasted for seven to eight weeks.

In the current scenario after eight weeks of the rally from mid-July low (10,807), the index seems to have entered in a corrective phase, thus maintaining its rhythm of each directional move lasting for seven to eight weeks.

Structurally, the index has entered a corrective phase by breaching prior week’s low (11,393) for the first time in nine weeks.

Going forward, we expect Nifty to extend its consolidation phase over the next few weeks in the broad range of 11,650-11,200 amidst the stock specific action, which will help cool off some of the overbought condition developed after 11 percent strong rally in the last month.

We expect the current corrective decline should be used as a buying opportunity in the quality stocks in a staggered manner.

We expect strong demand to emerge in the range of 11,100-11,200 range, as it is the confluence of the following technical observation:

a) 61.8 percent retracement of eight weeks up move (10,807-11,760) at 11,171

b) Bullish gap recorded on July 27, 2018 (11,210–11,167)

c) As per change of polarity concept earlier high (11,172) would now reverse its role as support

d) The lower band of weekly rising channel drawn adjoining March to July 2018 lows of 9,952–10,604, projected from May 2018 high (10,929), placed around 11,120

Structurally, Nifty midcap index took a breather to cool off from the overbought situation formed during late July-August 2018 rally (13 percent).

We believe that the index is likely to enter a consolidation phase that would assist Nifty midcap index to form a higher base formation amid the stock specific action.

As the broader structure remain positive since the recent pullback of 2,388 points off July 2018 low of 17,700 is larger in magnitude than the previous pullback in March-May 2018 (2,027 points) and recently, index resolved out of bullish falling wedge pattern.

Hence, one should focus on accumulating quality stocks in a staggered manner in the ongoing corrective phase.

Here is a list of top three stocks which could give 15-23% return in next 6 months:

Alkem Laboratories: Buy| CMP: Rs 2130 | Target: Rs 2630| Stop Loss: Rs 1960| Return: 23% | Time Frame: 6 months

The share price of Alkem Laboratories has seen a steady up move in the last three months as it rebounded from the major support area of Rs 1700-Rs 1750 as it is the lower band of the last one year’s consolidation.

The stock is currently forming a higher peak and higher trough on all time frames highlighting a robust price structure.

The stock is at the cusp of a major consolidation breakout of the last 17 months signalling the resumption of the up move after the recent consolidation thus offering a fresh entry opportunity to ride the next up move in the stock.

The price up moves in the last two months is supported by the strong volume of more than twice the 10 weeks average volume of 3.6 lakhs shares per week signalling larger participation in the direction of the trend.

Going ahead, we expect the stock to hold the strong support area of Rs 1980 which is being the confluence of the 52-weeks EMA and the lower band of the consolidation of August 2018 placed around Rs 1980 level.

Based on the above technical observation we expect the stock to continue its positive momentum and head towards level of Rs 2640 in the medium term as it is the 123.6 percent external retracement of the January-April 2018 decline (Rs 2469 to Rs 1726) placed at Rs 2640 level.

Greaves Cotton: Buy| LTP: Rs 152| Target: Rs 180| Stop Loss: Rs 142| Return: 18%| Time Frame: 6 months

The share price of Greaves Cotton has seen a steady up move since April 2018 as it rebounded from the major support area of Rs 115-Rs 120 being the lower band of the last three year’s consolidation.

The stock is currently forming a higher peak and higher trough on all time frames highlighting a robust price structure.

During August 2018, the stock has registered a resolute breakout above the falling channel containing the entire price activity of the last 14-months from the all-time high (Rs 179).

It is seen sustaining above the breakout area in the last four weeks, thus supporting the positive bias and offers a fresh entry opportunity in the stock.

Going ahead, we believe the stock would hold the key value area of Rs 143 level as it is the confluence of the following technical parameters: observation:

a) the consolidation area of August 2018 is around 144

b) 50 percent retracement of the previous up move from Rs 120 to Rs 165 is also placed around Rs 143 levels

We expect the stock to continue its positive momentum and test level of Rs 180 as it is the price parity of the previous up move from Rs 120 to Rs 158 (38 points) added to the recent low of Rs 142 projecting upside towards Rs 180 (142+38=180)

Balrampur Chini Mills: Buy| LTP: Rs 78| Target: Rs 90| Stop Loss: Rs 71| Return: 15%| Time Frame: 1 months

The share price of Balrampur Chini has recently witnessed a breakout above the last four months consolidation in the broad range of Rs 75-Rs 60 signalling the reversal of the corrective trend and offers a fresh entry opportunity to ride the next up move in the stock.

The last four months consolidation in the broad range of Rs 75 to Rs 60 has helped the stock form a base after the sharp decline from the November 2017 high (Rs 179).

Strong volume during the consolidation suggests an accumulation of the stock at the crucial support area is the 80 percent retracement of the 2015-2017 up move (Rs 37 to Rs 182).

Among the oscillators, the daily MACD remains in an uptrend and is seen sustaining in positive territory thus supports the positive bias in the stock.

We expect the stock to trade with positive bias and head towards Rs 90 level in the short term as it is the measuring implication of the range breakout from Rs 75 to Rs 60 (75-60=15 points), plus, the breakout area of Rs 75 suggests upside towards Rs 90 level (75+15=90).

Disclaimer: The author is Head Technical at ICICI Direct.com Research. The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.