Stocks to buy for short term: Market barometer Nifty 50 stayed range-bound for the week ended 22 May amid persistent uncertainties over a potential US-Iran peace deal, elevated crude oil prices, and the Indian rupee’s weakness.
The Nifty 50 largely traded within the 23,300–23,850 zone, ending the week with a nominal gain of 0.32%.
The domestic market is likely to remain range-bound in the near term, with investor sentiment hinging on developments around a potential US-Iran deal, the trajectory of crude oil prices, and movements in the dollar-rupee exchange rate.
On the technical front, Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, noted that the Nifty 50 continues to consolidate within the broader 23,300–23,850 range, indicating ongoing volatility and indecision in the near term.
However, Patel added that despite intermittent weakness, the index has managed to hold above the crucial 23,300 support zone, which keeps the broader market structure intact.
“We continue to believe that a decisive breakout and sustained move above 23,850 could trigger the next leg of the rally and gradually open the path towards fresh highs in the coming months,” Patel said, who sees 24,200 as the immediate resistance for the Nifty, followed by stronger hurdles around 24,600 and eventually the psychological 25,000 mark.
On the downside, Patel believes the broader trend is expected to remain constructive unless the index slips below the important 23,100 support zone.
“Overall, traders are advised to maintain a cautiously optimistic and stock-specific approach, as selective sectors and quality setups are likely to outperform amid ongoing volatility,” Patel said.
On the other hand, Bank Nifty witnessed heightened volatility during the week and successfully filled the important gap support near the 52,800 zone, which also coincides with the 61.8% Fibonacci retracement level.
According to Patel, the index has since shown signs of stabilisation and consolidation, indicating the gradual emergence of buying interest from lower zones.
“Going ahead, the immediate hurdle for the banking index is placed near 54,500. A decisive breakout above this level could trigger a strong up move in banking stocks and significantly improve overall market sentiment,” said Patel.
“Once 54,500 is crossed convincingly, Bank Nifty has the potential to outperform the broader markets and may head towards the 56,000–58,000 zone in the coming weeks, supported by strength in heavyweight private banking names and improving momentum indicators. The broader setup remains constructive as long as the index sustains above the key 52,800–53,200 support zone,” Patel said.
Stock picks for the short term
Jigar Patel recommends buying the following three stocks for the next 1-2 weeks:
Dixon Technologies (India) | Previous close: ₹11,722 | Buying zone: ₹11,800 to ₹11,600 | Target price: ₹13,000 | Stop loss: ₹11,000
Patel highlighted that Dixon Tech has witnessed a strong bullish breakout after surpassing its previous swing high (B point) on a closing basis, as depicted in the chart.
With this breakout, the stock appears to be progressing towards the completion of a bullish AB=CD pattern, with the projected D point near the ₹13,000– ₹12,950 zone.
Momentum indicators continue to support the positive outlook, with RSI, MACD, and DMI all indicating strengthening bullish momentum and improving trend structure.
“Considering the overall technical setup, traders may consider buying in the ₹11,800– ₹11,600 zone, with a stop loss at ₹11,000. On the upside, the stock has the potential to move towards the ₹13,000 target in the coming weeks,” said Patel.
Aarti Industries | Previous close: ₹476.20 | Buying zone: ₹480 to ₹460 | Target price: ₹540 | Stop loss: ₹435
Patel pointed out that Aarti Industries has recently witnessed a strong breakout above its major Yearly Camarilla (R 4)and Floor Pivot resistance levels (R 1)on the monthly chart.
Importantly, the stock has also successfully retested the breakout zone, which is now expected to act as a strong support area going forward.
Momentum indicators continue to remain favourable, with MACD, RSI, and DMI all indicating positive strength and improving bullish momentum.
“Considering the overall technical structure, traders may consider accumulating the stock in the ₹480– ₹460 zone, with a stop loss at ₹435. On the upside, the stock has the potential to move towards the ₹540 target in the coming weeks,” said Patel.
The Ramco Cements | Previous close: ₹914.55 | Buying zone: ₹920 to ₹900 | Target price: ₹990 | Stop loss: ₹870
Patel said Ramco Cements has formed a strong base near the ₹880– ₹900 zone, indicating stability at lower levels.
As per Patel, the support zone is well supported by the 78.6% Fibonacci retracement, 61.8% AB=CD Alternate Price Relationship, and the 1.27% external retracement, making the ₹900– ₹890 zone a crucial demand area.
Momentum indicators are also showing signs of improvement, with oscillators gradually losing downside steam, suggesting that selling pressure may be fading.
“Considering the overall technical setup, traders may consider buying in the ₹920– ₹900 zone, with a stop loss at ₹870. On the upside, the stock has the potential to move towards the ₹990 targeting the coming weeks,” said Patel.
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Disclaimer: This story 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.
