Stocks to buy for the short term: Indian equities ended higher for the week ended Friday, 7 August, despite volatility triggered by the rollout of the new F&O Closing Auction Session (CAS).
Extending gains for the second consecutive week, the Nifty 50 rose by around 0.77%, while the 30-share pack Sensex climbed 0.52%, thanks to a decline in crude oil prices and the RBI’s upbeat commentary on India’s growth and inflation.
US bond yields and the dollar moderated as labour market data came in softer, which drove down expectations of a near-term Fed rate hike.
This week, many key macro data, including India and US CPI inflation readings, will be released, influencing market sentiment.
From a technical perspective, the broader market structure remains positive. Benchmark Nifty decisively crossed 24,500 on Friday.
According to Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, a sustained move above 24,750 could trigger the next leg of the rally towards 25,000 and higher. On the downside, 24,400–24,100 remains the crucial support zone. As long as this support holds, any decline should be viewed as a buying opportunity.
For Bank Nifty, the key support zone is 57,700–57,500, while 58,000–58,250 remains the key resistance area. A decisive breakout above 58,250 could open the way towards 58,730–59,000, said Patel.
Stock picks for the short term
Jigar Patel suggests investors should follow a buy-on-dips strategy, but avoid aggressive buying at higher levels. He recommends buying the following three stocks for the next 1-2 weeks:
Bharat Forge | Previous close: ₹2,265.20 | Target price: ₹2,400 | Stop loss: ₹2,175
As per Patel, Bharat Forge has given a strong bullish breakout, with the stock sustaining well above the Ichimoku cloud and the 21-day EMA, indicating a positive trend structure.
The DMI setup remains favourable, with +DI at 26.29 comfortably above -DI at 12.22, while ADX at 25.09 confirms that the trend has adequate strength.
MACD remains positive, supporting the bullish momentum.
“RSI at 68.38 indicates strong buying interest, although the stock is approaching the overbought zone. The stock can be considered for fresh buying with a stop loss at ₹2,175 and an upside target of ₹2,400,” said Patel.
EID Parry India | Previous close: ₹805.10 | Target price: ₹850 | Stop loss: ₹780
As per Patel, EID Parry is showing improving technical momentum after recovering from its recent lows.
The stock is trading above the 21-day EMA at ₹777, while the MACD remains positive, indicating strengthening momentum.
The DMI setup is also bullish, with +DI at 30.35 well above -DI at 14.17, although ADX at 23.77 suggests the trend is still developing.
“RSI at 60.70 supports the positive bias without entering the overbought zone. The stock can be considered for fresh buying with a stop loss at ₹780 and an upside target of ₹850,” said Patel.
GMDC | Previous close: ₹582.80 | Target price: ₹635 | Stop loss: ₹560
Patel pointed out that Gujarat Mineral Development Corporation (GMDC) is showing signs of a potential reversal after finding support near ₹550.
The stock has moved back above its 21-day EMA at ₹577, while MACD has turned positive, indicating improving momentum.
The DMI setup is also favourable, with +DI at 21.94 above -DI at 16.41. RSI has moved above 50, suggesting strengthening buying interest.
“Although ADX at 20.07 indicates that the trend is still developing, the overall setup is improving. The stock can be considered for fresh buying with a stop loss at ₹560 and an upside target of ₹635. The bullish view remains valid as long as ₹560 holds,” said Patel.
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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.
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