Indices in trade today (June 18, 2021), after a volatile session and a drag of up to 250 points on the Nifty, ended flat at 15683. So, while headline indices trade close to their all time highs and there is a cautious mood among investors, if you have a penchant for risk and want to make some meaningful gains in the short term, here are some short term stock picks by ICICI Direct.
For the housing financier, ICICI Direct has set a target price of Rs. 2950 in the short term of 3 months. ‘Buy' in the stock is advised to be initiated in the range of Rs. 2525-Rs.2565 and a stop loss of Rs. 2348 has to be placed.
Rationale given: HDFC Ltd has relatively underperformed in the current up move of the markets but recently witnessed a sharp pullback with better-than-expected results. However, the stock has been exhibiting significant accumulation in its price distribution pattern. The daily returns are largely distributed from 0% to 2%. Moreover, the right tail is significantly longer than the left tail suggesting positive bias prevailing in the stock.
From a delivery perspective, the stock saw strong delivery based action recently. After a round of cool-off, fresh delivery buying was evident. It seems there is ongoing accumulation in the stock at every levels.
The Z score has also been exhibiting high delivery activity that took place in the stock recently. The 30 day volatility moved higher than its 60 day volatility due to sharp up move being seen in the stock. However, we believe it will subside in the days to come and ongoing momentum may continue in the stock.
2. Page Industries:
The owner of Jockey brand, Page Industries, is one of the expensive scrip listed on the Indian bourses. Currently, the scrip of Jockey is priced at Rs 29,699 and its 52-week high price is Rs. 32,460.
For the quarter ended March of FY21, the company posted 272% jump in its profit at Rs. 115.56 crore in comparison to Rs. 31 crore in the corresponding period last year. This was owing to sharp uptick in demand for the company's product line across categories.
ICICI Direct sees the stock to hit a price of Rs. 36,200, implying an upside of over 17.5%. Stop loss is advised to be placed at Rs. 27,850. A ‘ buy' in the scrip is recommended in the range of Rs. 30,350-30,650.
"We expect stocks like Page Industries to resume their fresh uptrend from here onwards. The reason for this view is the pick-up in delivery volumes along with significant low leverage prevailing in the stock The key trigger is likely to come from the future segment where the open interest has declined substantially in the last few months despite a range bound to positive performance seen in the stock.
The current open interest in the stock is significantly low while marginal accumulation was observed in the last few sessions. We believe with fresh long additions, the stock should start performing from here onwards. The stock has been hovering in the range of 27500-31000 in the last few months. Despite many attempts, it failed to move in line with the broader markets. However, in the May series, it moved up on the back of fresh delivery volumes. We believe recent declines provide a good opportunity to enter the stock once again.
The stock witnessed one year high delivery activity on April 26, 2021 near Rs. 30500 levels. After a round of decline from these levels, it has finally moved above it in May post its quarterly results. The recent declines provides a good risk reward opportunity in the stock The stock has been finding it tough to move above its long term mean+2* levels in the last one year despite many attempts. It has been trading below these levels since early 2020. Currently, these levels are placed near Rs. 30800 and a move above these levels should trigger further upsides towards Rs. 36000 levels
3. Tata Motors:
For the auto major, the brokerage firm has set a target for Rs. 405, i.e. an upside of over 14 percent given the recommended buy price of Rs. 355 in a short term of 3 months. Stop loss suggestion for the scrip is Rs. 324. Buying in the scrip is advised at a price of Rs. 348-358.
Rationale: The stock recently registered a breakout above the last four month's consolidation range (Rs. 342- 279), thus opening upside towards Rs. 405 levels as it is the measuring implication of the recent range breakout (342-279=63 points) added to the breakout area of Rs. 342 signalling upside towards Rs. 405.
Key point to highlight is that the stock has witnessed a shallow retracement while a higher base above the 20 week's EMA and the 38.2% retracement of previous up move (Rs. 157-342) signals a robust price structure and higher base formation. The weekly 14 period's RSI has recently generated a buy signal, thus validating the positive bias, said the research report.
The auto index is seen breaking above its last five month's consolidation signalling resumption of up move. Among large cap auto stocks we remain constructive on Tata Motors as it formed a higher base above the major support area of Rs. 280 and is seen resuming its primary up trend, thus offering a fresh entry opportunity.
Disclaimer: Note the above recommendations are taken from brokerage report and should not be considered as investment advice as neither the company nor its authors shall be held liable for any kind of loss incurred. The story is only informational purpose.
4. Sanghvi Movers
Sanghvi Movers Limited (SML) is the biggest crane rental company in India and International Cranes (June 2020) has ranked the company as the fifth largest globally. The company's fleet comprises heavy duty hydraulic telescopic and crawler cranes.
ICICI Direct recommends buying the scrip in the range of Rs. 188-Rs. 196 for a upside target of Rs. 230 in the 3 months. The scrip last closed at a price of Rs. 198.45. Stop loss advised for the scrip is Rs. 172.
Rationale: The infra sector has relatively underperformed the benchmark over the past couple of years. Within the infra space, Sanghavi Movers has witnessed a structural turnaround as it logged a resolute breakout from five year's downward sloping trend line backed by robust volumes, indicating conclusion of five years corrective phase, auguring well for acceleration of upward momentum.
Breakout from past two year's base formation (Rs. 142-43) indicates resumption of primary uptrend that
makes us believe the stock would resolve higher and gradually head towards our earmarked target of Rs. 230 as it is 80% retracement of 2017-20 decline (Rs. 274-43).
Key point to highlight since June 2021 is that, on multiple occasions 50 days EMA has acted as a strong support and subsequently buying demand emerged, highlighting inherent strength.
On the oscillator front, weekly MACD is marching upward while sustaining above zero line,indicating acceleration of upward momentum.