3 stocks to buy for 7-18% returns in 3-4 weeks

Axis Securities has come out with a list of three stocks that it believes can deliver 7-18 per cent in the next three to four weeks. These stocks namely Dr Reddy's Laboratories Ltd (DRL), Action Construction Equipment Ltd (ACE) and Aegis Logistics Ltd look strong on technical charts, the brokerage said. It noted that ACE and DRL have breached the 'Falling Channel' pattern, while Aegis Logistics is sustaining above the medium-term upward-sloping trendline

In the case of Dr Reddy's Labs, Axis Securities said the stock has broke out of the 'Falling Channel' pattern at the Rs 1,288 level on the weekly chart and is being supported by a strong bullish candle, reaffirming its medium-term uptrend.

The DRL stock, it said, has formed a higher high-low pattern on the weekly chart, maintaining its position above the medium-term uptrend, indicating a positive bias. "The weekly RSI strength indicator crossed above its reference line, generating a BUY signal. The RSI broke above the downward-sloping trendline, confirming strength in the price action. The above analysis indicates an upside towards Rs 1,405-1430 levels," Axis Securities said.

ACE too has decisively breached the 'Falling Channel' pattern at the Rs 1,460 level on the weekly chart with robust volumes, signalling a continuation of the medium-term uptrend, Axis Securities said in its weekly report.

"Volume activity remained subdued during the pattern formation; however, a surge in volume at the breakout indicates increased market participation. The stock found support at the 38 per cent Fibonacci retracement level of the rally from Rs 644 to Rs 1,695, near Rs 1,168, and rebounded sharply, establishing a robust medium-term support base," Axis Securities said.

The weekly RSI strength indicator is above its reference line, indicating a positive bias, the report said adding that the above analysis indicates an upside of Rs 1,660-1,700 levels.

In the case of Aegis Logistics, the stock is sustaining above the medium-term upward-sloping trendline, with a bounce confirming strong support at the trendline. The increase in volume activity at the support level, near the upward-sloping trendline, suggests that market participants are establishing positions at this crucial support zone.

"The stock holds above its key short and medium-term daily moving averages (20-, 50-, 100-, and 200-day), indicating a positive bias. The weekly RSI strength indicator crossed above its reference line, generating a Buy signal. The above analysis indicates an upside of Rs 935-955 levels," Axis Securities said.