The domestic market is brimming with optimism. So far in December, the equity benchmark Nifty 50 has gained roughly 7% due to significant buying by foreign portfolio investors despite solid macroeconomic data and the continued decline in US government yields.
According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, two important factors are fueling the market's current robust surge. One, FIIs (foreign institutional investors) have become large buyers, investing approximately 20,000 crore in the last two weeks, including bulk purchases. Second, the rally is being led by previously underperforming sectors such as banking and information technology.
A key takeaway from recent market activity is that in the tug-of-war between FIIs and DIIs. The latter have routinely outperformed the former by buying from them when they sell and selling to them at considerably higher prices, according to Vijayakumar.
"With the exception of valuations, global and domestic factors are favourable to the market." It makes sense to stay involved, especially in large caps. "Some profit booking can be considered in mid and small caps with very high valuations," said Vijayakumar.
The market is projected to enjoy healthy increases in the short term, but investors should avoid getting carried away and betting on firms with strong fundamentals and technical indicators. Experts predict the nine equities listed below will provide healthy returns in the next three to four weeks. Take a look at this:
Jigar S. Patel, Anand Rathi Share and Stock Brokers IRCTC Senior Manager of Equity Research | Target price: 900 | Stop loss: 719
IRCTC has been consolidating in the 630-750 area over the last three to four months. It recently gave a clean breakthrough from the mentioned range, which is profitable. The weekly breakout appears to be genuine because it is accompanied by reasonable volume. It has also broken through the one-year-old bear trendline.
On the indicator front, the weekly RSI has broken clear of its previous swing high of 60 and is now at 68 levels, while the weekly DMIs are positive, confirming our bullish view on the counter. "One can buy the stock in the zone of ₹775-785 for an upside target of ₹900 and stop loss should be ₹719 on a daily closing basis," Patel went on to say.
Kotak Mahindra Bank | 2,000 target price | 1,750 stop loss
On a weekly basis, the inverse head and shoulders patterns are seen following a period of reasonable consolidation between 1,700 and 1,790. The inverse head and shoulders pattern is forming exactly within the probable reversal zone of the bullish bat pattern, and the 200 EMA (exponential moving average) is providing support below it, making Kotak Mahindra Bank a profitable buy.
On the indicator front, both the daily RSI and the DMIs show a favourable bias in the counter. "One can buy this stock in small tranches in the zone of ₹1,835-1,855 and another in the zone of ₹1,805-1,815 with an upside target of ₹2,000, and the stop loss should be placed near ₹1,750 on a daily close basis," Patel added.
YES Bank | Stop loss: 20 | Target price: 26
YES Bank has gained some swift pace since last month and is already near the 22 mark. It recently repeated its prior swing high with massive volume and effectively maintained above it.
The most crucial aspect is that the five-year bear trendline has been broken, confirming our bullish position on YES Bank. The daily DMI and RSI indicators point to a bullish tilt in the counter. "One can buy the stock in the range of ₹21-22 for a target of ₹26 and a stop loss of ₹20 on a daily close basis," Patel told reporters.
KRBL | Stop loss: 345 | Target price: 405
The stock experienced a reasonable decline from its peak of 470. After some consolidation near 345 and taking support near 342 of the rising trendline zone, it has seen a pullback to increase the bias, currently displaying a bullish candle pattern on the daily chart advancing over the 50EMA level of 364.
The RSI is rising, having recovered from the oversold zone, and is well-timed to recommend a buy with significant upside potential observable from current levels. "With the chart looking attractive, we suggest buying and accumulating the stock for an upside target of ₹405, keeping the stop loss of ₹345," Koothupalakkal said in a statement.
ICICI Bank | Price target: 1,240 | Stop loss: 980
After a decent leap from the crucial 200-period MA (moving average) of 930, ICICI Bank indicated a clear breach above 1,020. Following a brief correction in the last six to seven sessions, it maintained a strong uptrend to enter a new zone with fresh upside apparent, and it is poised to reach the next upside goals of 1,110 and 1,240 in the next days. It recently revealed a falling trendline breakout above 980, strengthening the bias and indicating additional climb.
"With significant upside potential visible and technical parameters well-poised, we anticipate a further rise, allowing investors to buy and accumulate this stock." Only a decisive break below the 980 level will diminish the bias," Koothupalakkal explained.
Mahindra and Mahindra Financial Services | 325 target price | 272 stop loss
After a long period of consolidation, the Mahindra and Mahindra Financial Services stock formed a large bullish candle pattern on the daily chart with respectable volume and is now advancing past most of the significant moving averages such as the 50EMA, 100-period and 200-period MA, improving the bias. Following the brief consolidation, the RSI produced a spike, signalling a buy.
Wipro | Stop loss: 425 | Target price: 480
Last week, the Nifty IT gained ground, with many large-cap firms seeing significant gains. Wipro is one such name that has seen a significant increase in value. Wipro, on the other hand, has been a laggard, with consolidation visible in the recent several months.
It has now seen a consolidation breakout, which could lead to a new trend. This is backed up by the largest weekly volumes in a quarter. It has seen a bullish MACD crossover on weekly charts, as well as early indications of a buy signal in the Ichimoku system, which can lead to a significant rise.
Tata Steel | Stop loss: 128 | Target price: 146
Nifty Metal experienced a big breakthrough on the weekly charts, putting numerous metal stocks in a new zone. Tata Steel has been consolidating for some time, with some underperformance in comparison to its peers. It has seen a bullish triangle formation breakout on the weekly charts, which can offer the stock price a hefty boost.
The RSI is trading near its previous swing high of 70, which when crossed can quicken momentum, and a bullish MACD crossover on the weekly timescale is expected to keep the trend going.
RBL Bank | Stop loss: 275 | Target price: 320
RBL Bank has been in a solid uptrend for the last few quarters, with weekly charts consistently forming higher highs and lower lows. It saw a powerful breakout retest at 220, propelling prices quickly towards 280. The stock has lately seen a new three-year swing high breakout, which could lead to a move towards the 350 level.
