With signs of the second wave of COVID-19 outbreak seen in China and Wuhan, the outlook for stock markets remains uncertain in the near term. Concerns over the US-China trade tensions and the rupee's weakness also places further pressure on the Indian stock markets.
For those looking to invest for the short term, analysts recommending opting for stock-specific buying approach.
Here are some recommendations from brokerages:
Many brokerages remained positive on Hindustan Unilever Limited (HUL) after British drugmaker GlaxoSmithKline Pte (GSK) off-loaded 5.69 percent stake in the company.
Global research firm Credit Suisse maintained its outperform call on the stock last week with a target of Rs 2,400 per share. The call was based on the view that GSK's 5.7 percent stake sale removes the key overhang. It also said that premium of its peers Britannia Industries and Dabur India has narrowed to 5-15 percent after the recent correction.
A senior analyst at Prabhudas Lilladher said that the stock has witnessed decent erosion in the recent past and indicating a decent bounce back with the RSI also showing a reversal. It sees an upside of Rs 2,450-2,500 per share.
2. Sun Pharma
Kotak Securities told Economic Times that it expects the stock to rally to Rs 500 as there are "high chances of a fresh short-term uptrend rally from the current levels for the next few trading sessions." The brokerage said that if the stock sustains the Rs 450 level, it will see more uptrend wave till Rs 500.
HDFC Securities recommends a price target of Rs 495 on the stock with stop loss at Rs 454. "The pharma sector has been outperforming for the last couple of months. The relative performance of the stock has gone up compared to Nifty in the last one month," as quoted in ET.
A senior analyst at Prabhudas Lilladher said that based on technical analysis, Sun Pharma's trend chart "looks attractive and has signified strength." "Traders can buy and accumulate this stock for an upside target of Rs 510-530, keeping the stop loss at Rs 450."
3. Nestle India
Nestle India, another FMCG stock, is scheduled to deliver financial results for the March quarter on 12 May. ICICI Direct expects the company's profit to witness 16 percent growth during the quarter mainly due to a steep decline in the corporate tax rate in FY20. Further, its sales volume is also expected to grow for the review period as consumers started hoarding food products in March due to the lockdown.
Based on Kotak Securities' technical analysis, the stock is trading well above its 200-day SMA along with Higher High and Higher Low series pattern, which means that it is in a strong uptrend and is likely to continue its positive momentum in the near-term. An analyst at the firm told ET that if the stock receives support at Rs 17,125, it is likely to climb up to Rs 18,950.
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