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Sunday, May 19, 2013

Stocks that can give 20-60% return in

The Indian markets witnessed a sharp upmove this week with benchmark indices gaining between 1 and 1.5 per cent on the back of strong dollar inflows on expectations of rate cuts. The rally which was led by rate sensitive sectors is likely to continue after some consolidation, say analysts.

According to Ashwani Gujral, fund manager, ashwanigujral.com, after the massive rally, the longer-term charts look bullish and are signaling a breakout. Investors should hold on to stop losses and stay invested instead.

The mid-caps stocks, which have been lagging behind, are likely to outperform the benchmarks, say analysts.

"The upturn has still a long way to go and going forward we could see the mid-cap move up much faster than large caps as markets move to all-time high," said Sandip Sabharwal, CEO, Portfolio Management Services, Prabhudas Lilladher, to ET Now.

Following are the mid-cap stock picks by Manav Chopra, CMT, Technical Research Analyst, Nirmal Bang, which are likely to give good returns in the short to medium term:

GMR Infrastructure (Target price Rs 39, upside 61%):

The stock has been in a downtrend since December'07 forming a series of lower highs and lows and the descent halted in late December 2011. The prices formed a strong base around the Rs 18 & Rs 16 zone along with several bullish candles. The counter formed a Morning Star pattern which was completed in January'12. Later there was an emergence of Piercing candle and Bullish Engulfing pattern which marked the completion of the decline and suggested that there is limited downside from the current levels. The stock since March'12 formed a series of lower highs which formed a descending triangle pattern.

The RSI & MACD on the weekly & monthly chart after series of positive divergence gave a bullish crossover which indicated an impending trend reversal on cards. Both the momentum indicators suggested a rally which got confirmed from the pattern breakout.

The stock gave a bullish breakout with big bullish candles and the advance of its recent trough observed a large expansion of volumes and the strength behind the move indicated that a significant low has been formed.

Buy the stock with a stop loss of Rs 21 for a target of Rs 30-33-39 in the next 4-5 months.

The stock ended at Rs 24.20, up 4.54 per cent, on the BSE. It touched a high of Rs 25 and a low of Rs 22.75 in trade on Friday.

IDFC (Target price Rs 202, upside 23%):

The stock has been in a downtrend since January'13 forming a series of lower highs and lows and the decent halted in early March'13 as the stock formed a Bullish Inverted Head & Shoulder Pattern. The MACD on daily chart after a positive divergence in histogram gave a bullish crossover which formed the Head of the Pattern. Both the momentum indicators suggested a rally which got confirmed from the pattern breakout.
The right shoulder formed big bullish candle on 15th May'13 which hinted for an upside breakout and kept the bulls interested. As a major reversal pattern, the Head and Shoulders Bottom forms after a downtrend and its completion marks a change in trend.

The MACD has managed close above the falling resistance line which has indicated a bullish bias and has confirmed a trend reversal. The stock gave a breakout with big bullish candles and the advance off the right shoulder observed a large expansion of volumes and the strength behind the moveindicated that a significant low has been formed.

Buy the stock with a stop loss of Rs 154 for a target of Rs 181-188-202 in the next 2-3 weeks.

The stock ended at Rs 163.40, up 0.28 per cent, on the BSE. It touched a high of Rs 165.45 and a low of Rs 161.60 in trade on Friday.

Titan Industries (Target price Rs 335, upside 22%):

The stock has been in a short term downtrend since August'12 forming a series of lower highs and lows and the descent halted in mid March'13 around the Rs 240 levels. The recent March'13 bottom was a high probability reversal area and a strong support cluster zone as it coincided with the 50 per cent retracement levels of the previous rise and 50-sma.

The stock formed multiple bullish candles near the support clusters which kept the bulls interested. The stock on the monthly chart formed a Hammer pattern followed by a Bullish engulfing candle which indicated limited downside from the current levels and a high risk/reward for long positions.

There is absence of negative divergence and positive reversal pattern in RSI on the weekly charts which suggest that the advance is not yet done and one can expect further rallies into this counter. The stock has also breached the falling trend line drawn from the August'12 highs which has confirmed a trend reversal and resumption of the original trend.

Buy the stock with a stop loss of Rs 260 for a target of Rs 312-335 in the next 2-3 weeks.


The stock ended at Rs 275.25, down 1.87 per cent, on the BSE. It touched a high of Rs 280 and a low of Rs 272.90 in trade on Friday.

(Disclaimer: The analyst may have a position in the scrip mentioned above. The views given above are the personal views of the analyst and do not represent those of EconomicTimes.com.)

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