The market seems to be on a strong footing with the benchmark indices relentlessly hitting new highs day after day, aided in large part by positive domestic and global cues. Technically, too, overall, the Nifty50 looks positive, though it seems to be in the overbought zone given the consistent run up in the recent past.
Hence, the ongoing rally may continue in the short to medium term but given the overbought levels, a small correction and consolidation can't be ruled out. Generally, such intermittent corrections and consolidations are always healthy for the market, which can make it ready for the next uptrend, experts said.
They expect the Nifty to hit 21,500-22,000 points in coming months. The Nifty has formed bullish candlestick pattern with long lower shadow on the daily charts on December 5, indicating buying interest at lower levels.
The Bank Nifty has formed a High Wave or Doji kind of candlestick pattern on the daily scale, indicating indecisiveness among buyers and sellers about future market trend.
On December 5, the BSE Sensex had rallied 335 points to 69,200, while the Nifty50 jumped 116 points to 20,802 at 14:15 hours IST.
"The Nifty managed to hold on to the gains and also built upon it, which indicates that there is more steam left in the rally. On the upside we expect it to stretch higher till 21,500," said Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas.
In case of a dip/consolidation towards the support zone of 20,550-20,500, it should be used as a buying opportunity, he advised.
Mandar Bhojane, research analyst at Choice Broking, also said a correction, either in terms of time or price, seems warranted, suggesting that one should consider entering positions on dips for a more favourable risk-reward profile.
Moneycontrol collated the list of stocks that can give healthy double-digit return in the short term given the continuation of bull run in the equity markets:
Expert: Riyank Arora, technical analyst at Mehta Equities
NBCC (India): Buy | LTP: Rs 78.60 | Stop-Loss: Rs 70 | Target: Rs 100 | Return: 27 percent
The stock price has been finding support on its 21-day EMA (exponential moving average) and 50-day SMA (simple moving average), currently placed at Rs 69 and Rs 64.65, respectively. The primary trend for the stock has been bullish as it currently trades above all the important moving averages.
The stock price has experienced a strong breakout above its recent resistance zone of Rs 72 to Rs 74, accompanied by a sharp increase in volumes. With the stock continuously forming higher highs and higher lows, it appears poised for significant gains.
Shriram Properties: Buy | LTP: Rs 119 | Stop-Loss: Rs 102.50 | Target: Rs 166.60 | Return: 40 percent
The stock has experienced a strong breakout above its crucial resistance mark of Rs 115.75. The formation of a Rounding Bottom Pattern, accompanied by strong rising price bars and high volume activity, indicates the possibility of a strong upward movement.
The stock recently found support on the 21 EMA and bounced back, indicating a bullish trend on all time frames. With immediate support placed at the Rs 102.50 mark, it should serve as a good stop-loss for a calculated target of around Rs 166.60 on the upside.
Apollo Tyres: Buy | LTP: Rs 450 | Stop-Loss: Rs 425 | Target: Rs 500 | Return: 11 percent
Apollo Tyres has broken out of a bullish pattern on the daily time frame, marked by a bullish candlestick and above-average volumes, indicating strength. The stock currently trades well above all its important EMAs, which acts as a confirmation signal.
The stock is observed breaking above its crucial resistance mark of Rs 440. With the immediate support placed at the Rs 425 mark, it can serve as a good stop-loss, and the stock seems poised for a target price of Rs 500.
Expert: Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy
Finolex Cables: Buy | LTP: Rs 1,018 | Stop-Loss: Rs 940 | Target: Rs 1,170 | Return: 15 percent
Finolex cables has been correcting since September after hitting an all-time high of Rs 1,200. After finding support at the 200-DMA (daily moving average), the stock consolidated for one month and gave a breakout after forming a W-Pattern.
Finolex Cables crossed its 50-DMA in the previous week with good volumes and the daily RSI (relative strength index) is at 66, indicating the bullish momentum in the stock.
The stock can be bought with a target of Rs 1,170 and a stop-loss of Rs 940 on daily closing basis.
Hindalco Industries: Buy | LTP: Rs 519.25 | Stop-Loss: Rs 488 | Target: Rs 582 | Return: 12 percent
The Rs 500 level was a big resistance for Hindalco and the stock has been trading below it since April 2022. The stock decisively crossed this level with good volumes in the previous month forming a Cup and Handle pattern and has been holding above it since then.
The daily RSI at 69 signals bullish momentum with good upside potential. Any move up from here can push the stock to its next resistance level in the next four to five weeks.
Thus, Hindalco can be bought at the current level with a stop-loss of Rs 488 on daily closing basis for a target price of Rs 582.
ABB India: Buy | LTP: Rs 4,630.75 | Stop-Loss: Rs 4,365 | Target: Rs 4,990 | Return: 8 percent
ABB has been on a great bull run since November 2020, giving investors over a fivefold return since then. After crossing the big resistance at Rs 4,600, the stock corrected 18 percent from there.
Forming a Double Bottom pattern, ABB has given a breakout with good volumes from this level. The bullish momentum in the stock is reflected in its daily RSI of 73.
Thus ABB can be accumulated for a target of Rs 4,990 while keeping a stop-loss of Rs 4,365 on daily closing basis.
Expert: Kushal Gandhi, technical analyst at StoxBox
Indian Energy Exchange: Buy | LTP: Rs 145 | Stop-Loss: Rs 135.5 | Target: Rs 164 | Return: 13 percent
The weekly pattern analysis shows that price action has potentially bottomed out and buyers are gradually seizing strength after a 63 percent deep correction. The stock has been forming a 13-week base indicating further accumulation which is a positive sign. We reiterate a buy on IEX for a target of Rs 164 with a stop-loss at Rs 135.50.
Avenue Supermarts: Buy | LTP: Rs 3967.1 | Stop-Loss: Rs 3,767 | Target: Rs 4,610 | Return: 16 percent
The weekly pattern analysis exhibits that the price action is trading in a volatility contraction pattern. The constant shrinking of price and time correction in subsequent bases indicate the participation of smart hands attempting to absorb the available supply before it resumes its upward primary trend.
We anticipate a potential upside of 16 percent for the target of Rs 4,610 against a 5 percent risk with a stop-loss at Rs 3,767.
Mangalore Chemicals and Fertilisers: Buy | LTP: Rs 118 | Stop-Loss: Rs 112.5 | Target: Rs 132 | Return: 12 percent
The pattern analysis on the daily timeframe shows that the price action is holding on to a relatively strong trend as it trades within an ascending channel pattern.
The price action witnessed a tepid breakout following an elongated period of lateral trend within the channel along with signs of positive momentum burst. We reckon a buy on Mangalore Chemicals and Fertilisers for a target of Rs 132 with a stop-loss of Rs 112.50 for a favourable risk-to-reward opportunity.
Expert: Vinay Rajani, CMT, Senior Technical & Derivative Analyst at HDFC Securities
Bank of India: Buy | LTP: Rs 109.2 | Stop-Loss: Rs 102 | Target: Rs 125 | Return: 14.5 percent
The stock has been finding support on its 20-day EMA, currently placed at Rs 104. Primary trend for the stock has been bullish as it has been trading above all important moving averages.
The stock has formed a bullish inverted head and shoulder pattern on the daily chart. Indicators and oscillators like DMI (directional movement index) and RSI have turned bullish on the daily charts. The PSU Bank Index has resumed its primary uptrend after a small consolidation.
Disclaimer: The views and investment tips expressed by investment 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.
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