Stocks to buy for the short term: Market benchmarks, the Sensex and the Nifty 50, extended losses for the third consecutive session on Wednesday, 2 September, losing half a per cent each, as rising oil prices driven by renewed tensions between the US and Iran and a spike in global bond yields kept sentiment fragile.
Experts believe the market could be oversold, so on Thursday, 3 September, it may see some short covering amid positive global cues and a mild correction in oil prices.
However, technically, the overall setup remains weak. Amol Athawale, VP – Technical Research at Kotak Securities, pointed out that the market has been breaching key support levels with relative ease, which remains a matter of concern.
“A decisive break below the 23,600 support zone could trigger another phase of capitulation. For Thursday, 23,800 on the Nifty and 76,100 on the Sensex will remain crucial trend-deciding levels,” said Athawale.
“Sustaining below 23,800/76,100 could quickly drag the indices towards 23,600/75,400. On the upside, a sustained move above 24,100/77,200 could trigger a recovery towards 24,200–24,250/77,500–77,700,” Athawale said.
Stock picks for the short term
Amol Athawale recommends buying the following three stocks for the next 1-2 weeks:
Canara Bank | Previous close: ₹126.30 | Target price: ₹135 | Stop loss: ₹121
Athawale said that after its declining trend, Canara Bank is in the accumulation zone, where it is trading in a range-bound mode on the daily scale.
However, recent bullish activity near the lower boundary of the range is indicating good strength.
“The stock is expected to rebound and witness a fresh move from the current levels with a favourable risk and reward perspective. As long as the stock is trading above ₹121, the bullish texture is likely to continue. Above which, the stock could move up to ₹135,” said Athawale.
Steel Authority of India (SAIL) | Previous close: ₹196.50 | Target price: ₹210 | Stop loss: ₹188
Athawale said after its incredible up move and a breather of the last few sessions, SAIL is gaining further traction for a fresh up move.
The structure of the chart formation indicates a bullish continuation pattern, which is likely to persist in the near term.
“For positional traders, ₹188 would be the decisive level. Trading above the same uptrend formation will continue till ₹210. However, if it closes below ₹188, traders may prefer to exit from trading long positions,” said Athawale.
Bharat Dynamics (BDL) | Previous close: ₹1,253.70 | Target price: ₹1,340 | Stop loss: ₹1,210
According to Athawale, after a short-term price correction, the stock is available near its multiple support zone.
The bullish momentum near the support zone indicates that the downside is restricted. Therefore, the current rebound in stocks is expected to witness further upward move from the current levels with a favourable risk and reward perspective.
“For the next few trading sessions, ₹1,210 could be the trend decider level for the bulls, if it sustains above the same, we can expect further uptrend towards ₹1,340,” said Athawale.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
