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1 Mining And 1 Auto Stock To Buy For Gains In The Short Term As Recommended By ICICI Direct
Indices in trade on November 25, 2021 are trading firm with Nifty up 70 points at 17,485, while broader markets are seen underperforming. Bank Nifty is also under pressure after previous day's gains.
Meanwhile, brokerage firm ICICI Direct has listed out two stocks as its Momentum pick that can be bought for the short term. Here below are given the stocks together with the rationale for a 'Buy' as given by the brokerage.
1. NMDC:
The brokerage firm has recommended buying the scrip of NMDC in the price range of Rs. 141-144 for a target price of Rs. 156. This implies a return to the tune of 9.6 percent from the last traded price of Rs. 142.3. The stop loss suggested for the trade is Rs. 135. Notably the 'Buy' on the scrip is given for a period of 14 days.
Technical observations
• The share price of NMDC has formed a potential triple bottom at the 52 weeks EMA and the 80% retracement of the preceding up move (Rs. 122-213). The brokerage expect the stock to resume up move after the current higher base formation thus the scrip offers fresh entry opportunity.
• "We expect the stock to head higher towards Rs. 156 levels in the coming weeks being the 80% retracement of the preceding decline (Rs. 160-133). The stock has already taken six months to retrace just 80% of its preceding two months rally (Rs. 122-213)", adds the brokerage report.
• The weekly 14 periods RSI is at the cusp of generating a buy signal moving above its nine periods average thus validates positive bias in the stock of NMDC.
About NMDC:
Incorporated in 1958 as a GOI wholly owned public enterprise, NMDC is a large cap mining and minerals entity. Under the administrative control of the Ministry of Steel, the company is the country's single-largest iron ore producer.
2. Tata Motors:
On November 17, 2021, the brokerage firm has initiated a buy on the stock of Tata Motors for a 1 month period. The brokerage house suggested to buy the scrip in the price range of Rs. 515-523 for a price target of Rs. 570, resulting in an upside of 16.5 percent from the last traded price of Rs. 489. Stop loss recommended for the investment is Rs. 475.
Technical observation on Tata Motors:
• The Nifty Auto index is at the cusp of generating a breakout above the last four year range and forming higher peak and higher trough in all time frame. Tata Motors has been an outperformer within the Auto stocks and we expect it to continue with its outperformance.
• The last four weeks' breather has taken the shape of a bullish Pennant formation. The stock is currently seen registering a breakout above the same signalling continuation of the up move and offers fresh entry opportunity.
• ICICI Direct expect the stock to continue with its recent up move and head towards Rs. 570 levels being the 161.8% external retracement of the last four weeks breather (Rs. 530-468). The stock has already taken four weeks to retrace just 23.6% of the preceding four weeks rally (293-530), a shallow retracement signals a robust price structure and a higher base formation.
• Among the oscillators the weekly MACD remain in strong up trend and is seen diverging from its nine periods average thus validates positive bias.
Disclaimer:
These stocks provided above are taken from the brokerage report of ICICI Direct which lists them as its momentum picks. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.
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