As the Nifty faced a week marked by selling pressure, technical analyst Rajesh Palviya has identified four stocks that Ashow potential for significant returns in the next 3-4 weeks. This analysis is based on the current market conditions and the technical indicators of each stock. The stocks selected for potential upside include The New India Assurance Company, Oil India Ltd, PNB Housing Finance Ltd, and DCX Systems Ltd.
Market Overview:
The Nifty50 closed at 21622 on January 19, 2024, with a weekly loss of 272 points. The weekly chart indicates the formation of a “Bearish Engulfing” candlestick, suggesting a potential bearish reversal. Confirmation of this reversal would require a break and close below the previous week’s low, signaling a change in the trend to the downside.
However, if the Nifty manages to cross and sustain above the 21700 level, it could trigger buying interest, potentially leading the index towards the 21800-22000 levels.
Stock Recommendations:
- The New India Assurance Company:
- Recommendation: Buy
- Last Trading Price (LTP): Rs 242
- Target: Rs 278-287
- Upside: 18%
- Holding Period: 3-4 weeks
On the weekly chart, The New India Assurance Company breached the ‘Falling Channel’ at the 230 level with a strong bullish candle, signaling the continuation of a medium-term uptrend. The stock maintains its position above the 38% Fibonacci Retracement level, establishing a support base around 208. Volume activity during the pattern formation diminished, and its resurgence at the breakout suggests increased participation. The weekly RSI indicator has given a crossover above its reference line, generating a buy signal. The analysis points to an upside of 278-287.
- Oil India Ltd:
- Recommendation: Buy
- LTP: Rs 412
- Target: Rs 474-490
- Upside: 18%
- Holding Period: 3-4 weeks
Oil India broke above the “Bullish Pennants” formation at 382 on the weekly chart, indicating a continuation of the medium-term uptrend. Volume activity contracted during the pattern formation, and its resurgence at the breakout suggests increased participation. The stock establishes higher highs and higher lows, maintaining its position above the medium-term upward-sloping trendline. The weekly RSI is in a bullish mode, holding above its reference line, indicating a positive bias. The analysis suggests an upside of 474-490 levels.
- PNB Housing Finance Ltd:
- Recommendation: Buy
- LTP: Rs 876
- Target: Rs 1015-1045
- Upside: 19%
- Holding Period: 3-4 weeks
PNB Housing Finance broke above the nine weeks’ ‘Consolidation Zone’ between 827-760 on the weekly chart with a strong bullish candle, signaling the continuation of an uptrend.The breakout coincides with a rise in trading volume, indicating an upswing in market involvement.The stock adheres to a rising channel formation, indicating a medium-term uptrend. Recent support at the lower band, accompanied by a sharp rebound, signifies its advancement towards the upper band of the channel. The weekly RSI indicator has given a crossover above its reference line, generating a buy signal. The analysis indicates an upside of 1015-1045 levels.
- DCX Systems Ltd:
- Recommendation: Buy
- LTP: Rs 364
- Target: Rs 408-425
- Upside: 16%
On the daily chart, DCX Systems has broken out above the ‘Falling Channel’ level at 365 with a bullish candle, signaling the continuation of a medium-term uptrend. It bounced to 393 and experienced a throwback to the breakout area, confirming the breakout. The stock is holding above key moving averages (20, 50, 100, and 200 days SMA), signaling a strong uptrend.
The daily Relative Strength Index (RSI) is approaching a breakout point, suggesting the potential initiation of a positive trend.The analysis points to an upside of 408-425 levels.
Conclusion:
While the Nifty faces uncertainty, these four stocks have been identified based on their technical indicators, suggesting potential upside in the next 3-4 weeks. As with any market analysis, it’s important for investors to conduct their own research and consider the associated risks before making investment decisions. The provided recommendations are the views of the expert and do not necessarily reflect the opinions of the Economic Times.