Stocks to Buy: There could be a strong earning opportunity for investors in the stock market next week. Sudeep Shah, Head of Technical & Derivatives Research, SBI Securities, says Nifty Pharma index is on the verge of breaking its downward sloping trendline on the weekly chart. Other technical indicators are also indicating a strong rise in this index.
The two stocks that Shah has bet on for the coming week are Axis Bank and Garden Reach Shipbuilders and Engineers. He said that Axis Bank has given a strong breakout above the trendline on the daily chart, while Garden Reach Shipbuilders has started a new uptrend by breaking out of the range of Rs 2,516-2,793.
Apart from this, regarding Vodafone Idea, he believes that the price action and momentum indicators are indicating that there is scope for further upside in the stock.
1. Axis Bank
Sudeep Shah says that Axis Bank has given a decisive breakout above the downward sloping trendline on the daily chart. For the last five sessions, the stock was hovering around the 20-Day EMA of Rs 1,215–1,220, which the market regarded as a strong demand zone. Its RSI closed above 60, which is a growing bullish sign. The stock closed above the midline of the Bollinger Band, which means now the dominance of buyers is increasing. The momentum seems to be getting stronger after the breakout.
2. Garden Reach Shipbuilders and Engineers (GRSE)
GRSE was stuck in a narrow range of Rs 2,516–2,793 for almost a month. During this period, Bollinger Bands had also narrowed considerably, indicating low volatility. But on November 11, the stock gave a strong breakout outside this range and on Friday saw a follow-through rally with increasing volumes.
Now the Bollinger Bands have started spreading again, indicating new volatility and the beginning of a trending move. ADX is turning upward, which means the strength of the trend is increasing. The technical structure is indicating a strong uptrend.
Shah has advised to buy shares of Garden Reach Shipbuilders in the range of Rs 2,890 to Rs 2,910. The target price for this has been given at Rs 3,100. It has been advised to set stop-loss at Rs 2,810.
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