The Indian stock market had a rough start in October, following a strong rally in September. So far, the Sensex and Nifty 50 have both dropped by around 3%, mostly due to significant foreign institutional fund outflows. Foreign Portfolio Investors (FPIs) have sold Indian stocks worth nearly ₹50,300 crore in just six trading sessions in October.
The Nifty 50 index has fallen 4.7% from its record high of 26,277.35, reached on September 27. Despite this volatility, brokerage firm Anand Rathi has recommended two stocks as its “Emerging Picks” for October, expecting both to perform well in the coming months. The firm suggests buying these stocks for a period of 30 to 90 days.
Here are Anand Rathi’s two stock picks for October:
1. Tatva Chintan Pharma Chem
- Buy
- Target Price: ₹1,105 – ₹1,140
- Stop Loss: ₹930
Tatva Chintan Pharma Chem has been in a downward trend, similar to many other chemical stocks. However, the stock’s recent price movement suggests a potential bounce or reversal, as its weekly Relative Strength Index (RSI) shows positive divergence. Anand Rathi recommends buying the stock between ₹1,010 and ₹990, with a stop loss at ₹930, aiming for a target price of ₹1,105 to ₹1,140.
2. Tata Elxsi
- Buy
- Target Price: ₹8,410 – ₹8,700
- Stop Loss: ₹6,960
Tata Elxsi, a stock from the Tata Group, had a significant rally a few months ago, rising from ₹6,900 to ₹9,000. The stock has since pulled back, retesting its previous breakout level, which aligns with the 200-day Exponential Moving Average (DEMA). The stock is also showing a “golden crossover,” where the 50-day DEMA crosses above the 200-day DEMA, signaling a potential upward trend. Anand Rathi suggests buying Tata Elxsi around ₹7,540, with a stop loss at ₹6,960, targeting a price range of ₹8,410 to ₹8,700.
These two stocks are recommended for short-term gains in the next 30 to 90 days.
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