Stocks to buy: IDFC First, Asian Granito among 6 stocks that may rise in double digits in the short term, say analysts | Stock Market News

Stocks to buy: The Indian stock market benchmark, the Nifty 50, cracked almost 3 per cent in the morning session of trade on Monday, August 5, on an across-the-board selloff amid weak global cues. Investors appeared nervous amid growing concerns of a recession in the US and rising tensions in the Middle East.

The Nifty 50 opened at 24,302.85 against its previous close of 24,717.70 and dropped 3.2 per cent to the level of 23,921.65 during the session.

Experts remain optimistic about the Indian stock market for the medium to long term. However, they expect the market to remain volatile for the short term due to global news flows.

At this juncture, they recommend betting on quality stocks with strong fundamentals and favourable technical signals. Let’s take a look at these six stocks, recommended by experts, that may give healthy double-digit returns in the short term.

Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers

Asian Granito India | Previous close: ₹81.88 | Buying range: ₹88-84 | Target price: ₹101-106 | Stop loss: ₹76 | Upside potential: 29%

Asian Granito has recently confirmed a significant breakout from a long-standing falling trend line, surpassing the ₹86 mark.

This trendline breakout indicates a potential shift in the stock’s price trajectory, signalling the end of a downtrend and the possible beginning of an upward move.

In addition to this technical signal, the stock has formed a pattern resembling a bullish head and shoulders.

This pattern is typically considered a reliable reversal indicator from a downtrend to an uptrend.

The breakout and pattern formation is supported by increased trading volumes, suggesting strong buying interest, and the positive alignment of momentum oscillators, which reflect increasing bullish momentum.

“Traders are advised to buy Asian Granito within the price range of ₹88 to ₹84. To manage risk, a stop loss should be placed at ₹76 on a closing basis. The anticipated price targets for this trade are ₹101 and ₹106, which are expected to be reached within the next one to three months,” said Patel.

Borosil Renewables | Previous close: ₹551.50 | Buying range: ₹544-536 | Target price: ₹630-660 | Stop loss: ₹480 | Upside potential: 20%

Borosil Renewables has been in a consolidation phase, consistently trading above its 200-day exponential moving average (DEMA) around the ₹480 mark for several months.

This period of sideways movement indicated a phase of indecision or accumulation among market participants.

The stock recently experienced a breakout from this range, signalling a potential market sentiment and momentum shift.

This breakout is further validated by a positive crossover of moving averages, suggesting increasing bullishness.

A chart pattern resembling an inverse head and shoulders has also formed, typically considered a bullish reversal pattern. This combination of technical indicators suggests a strong potential for upward movement.

“Traders are recommended to buy Borosil Renewables stock within the price range of ₹544 to ₹536, with a protective stop loss set at ₹480 on a closing basis. The anticipated targets for this trade are ₹630 and ₹660, expected to be reached over the next one to three months,” said Patel.

IDFC First Bank | Previous close: ₹74.31 | Buying range: ₹72-75 | Target price: ₹84 | Stop loss: ₹68.5 | Upside potential: 13%

After peaking around the ₹101 mark in September 2023, the stock underwent a significant correction, dropping by 30 points, equivalent to a 29.34 per cent decline from its high.

This decline brought the stock down to a support level near the 0.618 Fibonacci retracement level of its prior uptrend, spanned from ₹53 to ₹101.

The 0.618 retracement level is often considered a critical support level in technical analysis, indicating a potential reversal point.

At this level, a bullish bat pattern has also emerged, a harmonic pattern that typically signals a potential bullish reversal.

The confluence of these technical indicators—support at the key retracement level and the formation of the bullish bat pattern—suggests that the current price levels are favourable for buying.

“It is recommended to buy the stock within the ₹72-75 range, targeting a price of ₹84. To manage risk, a stop loss should be set near ₹68.5 on a daily close basis. This strategy aims to capitalise on the anticipated reversal and subsequent upward movement based on the identified technical signals,” said Patel.

Shiju Koothupalakkal, Technical Research Analyst, Prabhudas Lilladher Pvt Ltd

Ramkrishna Forgings | Previous close: ₹887.20 | Buying range : ₹875 – 900 | Target price: ₹1,020 | Stop loss: ₹830 | Upside potential: 15%

The stock has witnessed a gradual slide from ₹997 and has taken support near the 50EMA level at ₹840.

Currently, with a positive bullish candle formation on the daily chart with huge volume participation, it has improved the bias.

One can anticipate a further rise in the coming days. The RSI has cooled off significantly from the highly overbought zone and is currently well-placed, indicating a trend reversal to signal a buy.

West Coast Paper Mills | Previous close: ₹630.75 | Buying range: ₹624 – 640 | Target price: ₹720 | Stop loss: ₹590 | Upside potential: 14%

The stock has witnessed a decent correction from ₹754 and has taken support near ₹617. Consolidation is happening, and the stock is showing signs of a revival, with improvement in the bias and volume.

The RSI has corrected quite significantly from the highly overbought zone. It is well-positioned, indicating a trend reversal to signal a buy.

Harsha Engineers International | Previous close: ₹570.20 | Buying range: ₹560- 575 | Target: ₹630 | Stop loss: ₹525 | Upside potential: 11%

The stock has indicated a series of higher top and higher low formations on the daily chart and recently took support near the ₹495 level.

It has witnessed a decent pullback to move past the significant 50EMA level at ₹520 to improve the bias, and currently, with strength indicated, has the potential to carry on with the positive move further ahead.

The RSI is on the rise and well-placed, with much upside potential.

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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.