The stock market has mounted a notable recovery since its August lows, marking its first green finish in three weeks on October 6. A promising sign appeared in the form of a dragonfly doji candlestick pattern on the weekly charts, fueling optimism for further gains in the Nifty50 index. If this momentum continues, market experts suggest that the Nifty50 could potentially reach levels of 19,800-20,000 in the near future, with immediate support seen at 19,600-19,500 and a crucial support level at 19,300.
During the truncated but eventful week ending on the last Friday, the Nifty50 gained 15 points, closing at 19,654.
Osho Krishan, senior analyst for technical and derivative research at Angel One, advises caution despite the captivating developments, emphasizing that the market is not entirely out of the woods. Krishan points out that robust resistance lies at 19,720-19,750, followed by another cluster around 19,800-19,850 for the current week. On the downside, an immediate support zone is expected at 19,580-19,500, with the make-or-break level resting at 19,300.
Arvinder Singh Nanda, senior vice-president at Master Capital Services, echoes Krishan’s sentiments, noting that the dragonfly doji pattern, typically considered a bullish signal, indicates a positive short-term trend for the Nifty. However, Nanda also highlights potential resistance at 19,800 for the upcoming week.
Now, let’s delve into the top 10 trading ideas from market experts for the next three to four weeks, based on closing prices as of October 6.
1. DLF (Buy)
- Current Price: Rs 548.7
- Stop-Loss: Rs 522
- Target Price: Rs 615
- Potential Return: 12 percent
DLF has demonstrated a consistent uptrend, punctuated by occasional consolidation phases. The stock tends to convincingly break out of these phases. Friday saw no exception as the stock broke out of a short-term congestion zone, accompanied by strong volumes and price intensity, indicating robust buying interest.
Given this breakout, the stock appears poised to ascend towards the Rs 600-610 levels in the upcoming sessions, with critical support expected at Rs 530.
2. Bajaj Finance (Buy)
- Current Price: Rs 8,169
- Stop-Loss: Rs 7,760
- Target Price: Rs 9,150
- Potential Return: 12 percent
Bajaj Finance stands out as one of the strongest non-banking financial companies (NBFCs) in the market. It recently garnered attention due to fundraising activities and rallied on the RBI’s decision to keep its policy rates unchanged.
What’s particularly noteworthy is the breakout achieved by this stock on Friday. This breakout comes after a two-year consolidation period, both in terms of time and price. Such a breakout is typically seen as a bullish sign, indicating that the stock’s upward momentum is likely to persist.
3. Equitas Small Finance Bank (Buy)
- Current Price: Rs 94
- Stop-Loss: Rs 86
- Target Price: Rs 105
- Potential Return: 12 percent
Equitas Small Finance Bank has been a standout performer within the banking sector, particularly in 2023. Although it experienced a correction starting in July, this correction did not result in a decline in price. Instead, the stock underwent a period of time correction, consolidating sideways to establish support levels.
Equitas Small Finance Bank found robust support around Rs 85 and subsequently formed a ‘double bottom’ pattern, breaking through it.
4. Easy Trip Planners (Buy)
- Current Price: Rs 42.35
- Stop-Loss: Rs 39
- Target Price: Rs 46.50
- Potential Return: 10 percent
After displaying weakness in the previous week, Easy Trip Planners witnessed a sustainable upside bounce in the week ending October 6. The recent upside breakout of the downtrend resistance has been confirmed by the stock’s rebound from weakness during the latter part of the week.
The stock price is now attempting to surpass another resistance level at Rs 43. Volume expanded during the upside breakout, and the weekly 14-period RSI (relative strength index) indicates positive momentum.
Buyers can initiate positions in Easy Trip at the current market price (CMP) of Rs 42.35, adding more on dips down to Rs 40.50, with upside targets set at Rs 46.50 and potentially Rs 52 in the next three to five weeks. A stop-loss at Rs 39 is recommended.
5. EID Parry India (Buy)
- Current Price: Rs 524.40
- Stop-Loss: Rs 485
- Target Price: Rs 575
- Potential Return: 10 percent
EID Parry India’s recent weeks saw a downward correction, which seemed to conclude last week as the stock price formed a doji-type candle pattern on the weekly timeframe chart. The recent swing low of Rs 506 could be considered a new higher bottom in a positive chart pattern.
Following the upside breakout of weekly moving average resistances like the 10-day and 20-day exponential moving averages (EMA) at Rs 490, the stock price found support at these moving averages during recent weakness—a positive sign. Volume expanded on Friday, and the weekly 14-period RSI exhibited positive momentum.
Investors may consider buying EID Parry at the current market price of Rs 524.40, with additional purchases on dips down to Rs 505. Upside targets are Rs 575 and potentially Rs 615 in the next three to five weeks, with a suggested stop-loss at Rs 485.
6. Godrej Agrovet (Buy)
- Current Price: Rs 515
- Stop-Loss: Rs 485
- Target Price: Rs 530-570
- Potential Return: 11 percent
Godrej Agrovet has been forming a rectangular pattern since July 2023. On Friday, it successfully closed above the upper range of this pattern, which stood at Rs 505. Resistance levels for the stock are expected at Rs 530 and Rs 570. The stock also closed above important daily averages, which could mitigate potential downside risks.
7. HUDCO (Buy)
- Current Price: Rs 92.15
- Stop-Loss: Rs 83
- Target Price: Rs 110-115
- Potential Return: 19 percent
HUDCO is in the process of forming a gradual rounding bottom pattern and may soon surpass the level of Rs 102. This would be a significant milestone for the stock, as it would reach its highest level since 2017. Both short-term and long-term moving averages are trending upwards, further supporting the stock’s momentum. To minimize potential losses, a stop-loss at Rs 83 is advisable.
8. Thomas Cook (Buy)
- Current Price: Rs 123
- Stop-Loss: Rs 100
- Target Price: Rs 145-160
- Potential Return: 18 percent
Thomas Cook appears to be forming a cup-with-handle structure, suggesting rapid consolidation. The tourism sector is performing well due to strong fundamentals, which could provide support at key levels. If the stock falls below Rs 123, it may find support at Rs 110 and Rs 100. Conversely, if it rises above Rs 123, resistance may be encountered at Rs 135, with potential targets at Rs 145 and Rs 160 in the medium term. It is advisable to buy the stock between Rs 123 and Rs 110, setting a stop-loss at Rs 100.
9. L&T Finance Holdings (Buy)
- Current Price: Rs 137.55
- Stop-Loss: Rs 127
- Target Price: Rs 156
- Potential Return: 13 percent
L&T Finance Holdings recently broke out of a bullish pattern on the weekly timeframe after nearly three years. The stock is trading and sustaining above all important EMAs, strengthening the bullish view. Indicators like the Ichimoku Cloud and RSI (Relative Strength Index) further suggest a bullish move. Observing these factors, a bullish move in L&T Finance Holdings towards a target of Rs 156 is possible. Buying between the range of Rs 135-137 with a stop-loss at Rs 127 is recommended.
10. Punjab Chemicals & Crop Protection (Buy)
- Current Price: Rs 1,217
- Stop-Loss: Rs 1,100
- Target Price: Rs 1,400
- Potential Return: 15 percent
Punjab Chemicals has broken out of a downwards sloping parallel channel pattern on the weekly timeframe with bullish candlestick patterns and above-average volume after nearly two years, indicating strength. The stock is trading above all important EMAs on the daily timeframe, which aligns with a bullish view. The Supertrend indicator and RSI also support a bullish continuation. Considering these factors, a bullish move in Punjab Chemicals towards a target of Rs 1,400 is possible. Buying in the range of Rs 1,210-1,217 with a stop-loss at Rs 1,100 is suggested.
These are the top 10 trading ideas from market experts for the next three to four weeks, based on closing prices as of October 6.
