Podcast | Stock Picks of the Day: A rate cut by RBI could help Nifty climb 11,000

Sameet Chavan

We had a nervous start for the week which was in continuation of previous week’s corrective mode. During the first half, there was a bundle of stocks which literally took it on the chin mainly on the back of some negative news flow or poor set of quarterly numbers.

However, the last couple of days of the week turned out to be saviour for our markets as we saw massive rally one day ahead of the Union Budget and on the Budget day as well.

In this process, Nifty eventually closed tad below the 10,900 marks by adding nearly a percent to the bulls’ kitty. One of the most keenly watched events, the ‘Union Budget’ is behind us now.

On the day, Nifty once made a valiant attempt to surpass the recent swing high of 10,987.45, but as we know, such days are known for their extreme volatility and this is exactly what we saw in the latter half. In the midst of this volatility, Nifty became successful in defending some key levels.

Recently, our markets had to undergo a stressful period and fortunately, the last two days have come up with some respite. With this, the index eventually recouped its previous week’s losses and in the midst of an extremely volatile trade managed to close in the safer zone.

Yes, although, we are yet to surpass the sturdy wall of 11,000, looking at the broader market participation on Friday, we will not be surprised to see it happening in the forthcoming week.

And since there are some hopes built in on the possible rate cut from the RBI in the next week’s policy, this would provide some impetus, and therefore, increases the possibility of surpassing the sturdy wall of 11,000.

Having said that, Friday’s low of 10,800 would now be seen as crucial support. A sustainable move below this may put a dent on all the above-mentioned possibilities.

At this juncture, a prudent strategy would be to keep focusing on individual stocks which have shown tremendous resilience despite recent uncertainty in the market.

Here’s a list of top three stocks which could give 6-15% return in next 1 month:

Godfrey Phillips: Buy| LTP: Rs 942.75| Target: Rs 1020| Stop Loss: Rs 903| Return 8%

The last three months have been fantastic for this high beta counter. The daily chart depicts a series of ‘higher highs and higher lows’ and in the process, the stock finally broke out from the trend line hurdle of Rs 930 with some authority.

Importantly, this move was supported by humongous volumes, providing credence to the price action. Post this, the stock prices saw some consolidation but we would construe this as a good buying opportunity.

We recommend going long for a positional target of Rs.1020 in coming days. The stop loss can be placed at Rs.903.

Jubilant Foodworks: Buy| LTP: Rs 1357.95| Target: Rs 1565| Stop Loss: Rs 1212| Return 15%

After enjoying a good multi-year Bull Run, the stock prices slipped into a consolidation mode. The last two days price action has been encouraging and due to a massive bump up on Friday, the stock finally seemed to have come out of the congestion zone.

If we look at the volume activity, it has risen substantially over the past three days, indicating the emergence of strong buying interest.

Considering this price and volume development, we expect the stock to resume its higher degree uptrend. Hence, one can look to go long around Rs 1340 – 1320 for a target of Rs.1565 in coming weeks. The stop loss can be placed at Rs.1212.

Titan Company: Buy| LTP: Rs 991.55| Target: Rs 1055| Stop Loss: Rs 964| Return 6%

This has been one of the rank outperformers in our market and is known for its steady performance. It appears as if it’s been enjoying its strong multi-year Bull Run which started a decade ago.

In between all natural corrections in this stock were interpreted as a good buying opportunity and this is what we saw a couple of months ago. The stock prices recovered sharply from the recent lows and went on to clock fresh record highs.

The daily chart looks extremely promising with a near term view and hence, we recommend going long for a target of Rs.1055 in coming days. The stop loss can be placed at Rs.964.

The author is Chief Analyst- Technical & Derivatives, Angel Broking

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