These 5 underperformers of 2021 are poised for strong gains in next 3-4 weeks: Experts
Investors’ wealth grew by nearly Rs 9 lakh cr so far in September.
Indian market created history in the week gone by as both Sensex and Nifty50 hit fresh record highs. The S&P BSE Sensex climbed Mount 59K, while the Nifty50 closed just a shade below 17,800 levels.
Investors’ wealth grew by nearly Rs 9 lakh cr so far in September. The average market capitalization of the BSE-listed companies grew from Rs 250 lakh cr as on August 31 to Rs 258.96 lakh cr as of 17 September.
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The overall sentiment in the market remains strong despite mixed global cues. Experts advise investors to remain stock-specific. The recent government push to kickstart the investment cycle will also aid sentiment.
During this week, the government announced PLI schemes for some sectors, and guarantee to back security receipts issued by the National Asset Reconstruction Company Limited for acquiring stressed loans will also support the sentiment.
“The PLI schemes announced by the government shows their strong intent to address the sectors’ challenges and pave way for the development of local capabilities and capacities, thus enabling companies to rightly capture the opportunity thrown open by China+1 strategy,” Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said.
“The constitution of a ‘Bad Bank’ in our view is a positive development as the focus remains on faster resolution of stressed assets, which will improve the balance sheet of banks. The upfront cash payment would also aid in providing incremental cash flows and will enable banks to focus more on their core operations,” he said.
Technically, the index is trading strong, and any dips should be used as a buying opportunity. Although, some consolidation at a higher level cannot be ruled out after a strong price action seen in September, but there still are no signs which suggest that traders should go short.
“Technically, benchmark Nifty maintained uptrend continuation formation which is broadly positive but due to temporary overbought situation, bulls may prefer to take a cautious stance near the 17800 resistance levels,” Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said.
“For Nifty, 17700 would be the immediate resistance level, which traders will have to look at, and below the same, the correction wave is likely to continue up to 17450-17350 levels. If the index trades above 17700, the uptrend texture will continue up to 17800-17950 levels,” he said.
Chouhan further added that contra traders can take a long bet near 17350 with a strict 17300 support stop loss. Meanwhile, the Bank Nifty has formed a strong bullish formation and the structure suggests further upside if it succeeds to trade above 37000.
We have collated a list of 5 stocks that have underperformed the Nifty50 so far in 2021, but are looking strong on technical charts:
Expert: Mehul Kothari, AVP – Technical Research at AnandRathi
3M India Ltd: Buy| LTP: Rs 25,274| Stop Loss: Rs 24,100| Target: Rs 27,000| Upside nearly 7%
The stock of 3M India is from the broader market space and has moved above its 200-DEMA confirming bullish bias. Further, we are witnessing a range breakout along with a positive crossover of short as well as medium-term moving average, which suggests that the stock is poised for a decent upside.
Traders are advised to buy the stock in the range of 25200 – 25000 with a stop loss of 24100 for an upside target of 27000 in the coming 3 – 5 weeks.
Expert: Rajesh Palviya, VP - Technical and Derivative Research at Axis Securities.
Hero MotoCorp: Buy| LTP: Rs 2931| Target: Rs 3040-3130| Stop Loss: Rs 2800| Upside 7%
On the daily chart, the stock has witnessed a breakout from the “Inverse Head and Shoulder” pattern around 2850 levels indicating the trend reversal.
The stock is well placed above its 20-day SMA’s which reconfirm bullish sentiments. Huge volumes at the breakout zone signal increased participation.
The stock is in an uptrend forming a series of higher tops and bottoms. The daily and weekly strength indicator RSI is in bullish mode which supports rising strength as well as momentum.
The above analysis indicates an upside of 3040-3130 levels*Holding period is 3 to 4 weeks.
LT Foods Ltd: Buy| LTP: Rs 67.80| Target: Rs 78-83| Stop Loss: Rs 65| Upside 15%
On the daily chart, we have observed strong accumulation within 71 to 61 levels along with huge volumes. Hence any decisive upcoming close above 71 levels, may confirm the “Consolidation” breakout.
On the daily chart, the stock has recaptured its 20-day SMA and is sustaining above the same indicating positive bias. The positive divergence on the daily RSI signals rising strength at lower levels.
The daily strength indicator RSI is placed above the 50 mark which supports rising strength. The above analysis indicates an upside of 78-83 levels. The holding period is 3 to 4 weeks.
ITC: Buy| LTP: Rs 231| Target: Rs 238-255| Stop Loss: Rs 219| Upside 10%
On the weekly chart, the stock has witnessed a “Triangular” formation breakout at 219 levels on a closing basis along with rising volumes. On the weekly chart, this buying momentum was observed from its earlier breakout zone of 200 levels.
This buying momentum was observed from 20-week SMA which reconfirms bullish sentiments. The daily and weekly strength indicator RSI is in bullish mode along with positive crossover which supports rising strength.
The above analysis indicates an upside of 238-255 levels. The holding period is 3 to 4 weeks.
Brokerage Firm: SMC Global Securities Ltd
Dabur India: Buy| LTP: Rs 653.95| Target: Rs 700-720| Stop Loss: Rs 615| Upside 10%
The stock closed at Rs 653.95 on 17th September 2021. It made a 52-week low of Rs 478.80 on 24th September 2020 and a 52-week high of Rs. 655.90 on 17th September 2021.
The 200-days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 560.56. The short term, medium-term, and long term bias are looking positive for the stock as it is trading in higher highs and higher lows on charts.
Apart from this, it was formed a “Bullish Pennant” pattern on daily charts, which is bullish in nature. Last week, the stock has given the pattern breakout along with high volumes and managed to close above the same, so, buying momentum may continue for the coming days.
Therefore, one can buy in the range of 645-649 levels for the upside target of 700-720 levels with a stop loss below 615 levels.
Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.
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