The Diwali Muhurat trading session pushed Sensex and Nifty to fresh all-time highs on Saturday. Sensex rose 390 points to hit fresh high of 43,830 against previous close of 43,433. Nifty too gained 109 points to 12,828 against previous close of 12,719. Sensex closed the Diwali trading session at 43,637.98, up 194.98 points or 0.45 per cent, and Nifty ended 50.65 points or 0.40 per cent higher at 12,770.60.
The first session of Samvat 2077 indicated bullish trades in the year ahead for the stock market, which has been hitting fresh all-time highs in almost every trading session recently. Brokerages too have become bullish on particular stocks till next, Diwali which is likely to push buying activity on benchmark indices.
Here's a look at some key picks by top brokerages for one year.
After a sharp decline in the month of September 2020, the stock price of Axis Bank Ltd has witnessed an excellent upside bounce in the subsequent month of October 20.
Currently, the stock price is making an attempt to move above the multi-month hurdle of Rs 520-530 levels.
The monthly 14 period RSI has sustained above 40-45 levels and is gradually moving up. As per its range movement of 30-60 levels, the monthly RSI is expected to move up to 60 levels (from the current reading of 47).
Considering the technical evidences discussed above, we recommend buying Axis Bank Ltd at CMP and average at 475, for the upside targets of 590 and 640, keeping a stop-loss on closing basis at 448.
Amara Raja Batteries
Stock has broken out from the downward sloping trend line on the monthly charts. The stock has been trading above all important moving averages which indicates a bullish trend on all time frames. Auto sector has been outperforming for the last many months. Nifty Auto is looking strong on the medium to long-term charts. Considering the technical evidence discussed above, we recommend buying the Amara Raja batteries in Rs.789.75- 800 band and average at 690, for the upside targets of 890 and 940, keeping a stop-loss on closing basis at 640.
From April to September 2020, volumes rose along with the gradual price rise. In October 2020, stock has risen with momentum and broke out from the long-term resistance. Monthly Indicators and Oscillators like DMI, MACD and RSI have shown fresh buying signals on the charts.
The auto sector has done exceptionally well since March 2020 bottom. Auto ancillary space is also expected to continue their outperformance in the coming months.
The stock is currently trading near its long-term support zone of 180-160. It has taken support of the lower band of Bollinger band on the monthly chart and is moving higher.
Also, positive divergence on RSI and SMI indicates that the current downward trend is losing its momentum which gives an early indication for trader/investor to create the long position at low risk near the end of the downtrend.
Considering the technical evidences, we recommend buying the Hindustan Petroleum Corporation Ltd. at CMP (187.15) and average at 171, for the upside targets of 210 and 223, keeping a stop-loss on closing at 166.
The stock is in completely new impulse/trending wave. The stock has formed strong breakout continuation pattern and weekly charts suggest uptrend wave likely to continue in the medium term. The strategy should be to keep buying on dips at crucial supports. Buy 50% at current levels and balance at 960. Keep a final stop loss at 850. On the upside the next wave should end between 1400/1440.
Cipla The stock is forming a "Cup with Handle" formation on monthly charts. Buy 50% at current levels and balance at 700. Keep a final stop loss at 650. On the upside it could move to 840 levels.
The stock is into a fresh technical breakout on long term charts. Currently it is into throwback mode to retest earlier major resistance. Buy 50% at current levels and balance at 3200. Keep a final stop loss at 3000. On the upside, the rally could extend up to 4000 levels.
The stock has fallen vertically during the period of lockdown and Covid -19 crisis. It was at 550 in the month of February 2020 and fallen to 268 levels by the end of March 2020. It is also under the pressure of sectoral weakness. However, technically, it is into gradual pull back on the upside and we could expect 480 in the near term from it. Buy 50% at current levels and balance at 375. Keep a final stop loss at 350. On the upside the rally could extend up to 480 levels.
The entire cement space is buzzing heavily. Now, we need to take a "Top Down" approach. The stock is following the formation of the trending wave. It is moving upward with a frequent consolidation, which is bullish for the stock. Technically, after crossing the crucial level of 920, it would arrest only at 1075. Buy 50% at current levels and balance at 770. Keep a final stop loss at 700. On the upside, the rally could extend up to 1075 levels.
Ventura Brokerage has initiated coverage on Godrej with a BUY call for a price target of Rs. 900 (48X FY23) representing potential appreciation of 30.8% over the next 24 months from the CMP of Rs 688
"India being the flagship market has underperformed on growth expectations. With a view to kickstart growth, a number of initiatives are been undertaken: GCPL is doubling down on increasing the share of rural revenues from the current 30%. Deepening penetration in traditional trade and using extensive data analytics will enable the management to manage marketing spends and distribution more effectively. Foray into the world of D2C by selling through their own website and capitalizing on rich consumer data with three of their India brands - Cinthol, B-Blunt and Godrej aer. The company plans to extend this approach to other brands that might benefit from closer consumer connect. Ramping up e-commerce in India (75% Y-o-Y growth) We expect India revenues to grow at 9.6% CAGR to Rs 7,053 by FY23," the brokerage said in its note.
Larsen and Toubro
In the last few months, the stock has seen a consolidation phase and has underperformed the benchmark index. However, off late, it has witnessed good buying interest which can be seen from rising volumes, said Angel Broking in its note.
The brokerage added that L&T stock has now given a breakout from its consolidation phase and has started forming a 'Higher Top Higher Bottom' structure. The ADX oscillator on the daily chart indicates a positive trend and the rising ADX line indicates higher probability of continuation of this trend in the near term. Looking at the above price-volume action and the placement of momentum oscillators, the brokerage said it expects the stock to outperform in the short term. Hence, traders are advised to buy the stock in the range of 1030-1050 for a potential target of 1150 in the near term. The stop loss for the trade should be placed below 995.