Top 10 trading ideas for February series as Dalal Street goes volatile ahead of Budget

Here are top 10 trading ideas by experts for February series, which could return up to 37 percent

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The market posted around 3 percent loss for the second consecutive week ended January 28 as bears tightened their grip over Dalal Street after hawkish Fed commentary indicating four rate hikes in 2022, further selling pressure at FII desk, and rising oil prices. The benchmark indices lost more than 6 percent in two straight weeks ahead of Union Budget scheduled on February 1.

The Nifty50 corrected up to 16,836 during the last week but managed to defend 17,000 mark amid volatility. Hence, experts feel, 16,800 may as a crucial support for the market in the coming days and if that gets hold around the Union Budget which is likely to set off volatility and there is no global concerns, then a short-covering-led sharp rally can’t be ruled out.

“Technically speaking, 16,800 is considered to be a crucial level because it coincides with the 78.6 percent retracement of the recent up move as well as the trend line support. Market has not only managed to hold it in the last couple of sessions but also had an excellent recovery to reclaim 17,000 with some authority. Hence, as long as this support holds, we remain hopeful for some recovery from here on,” says Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One.

“On the flip side, if the market manages to recover, we don’t see it surpassing the sturdy wall of 17,350 – 17,500 before the Budget. Whatever breakout has to happen (upwards or downwards), it is now likely to happen on or after the Budget only. Till then one should expect a range-bound movement and should focus on stock specific action,” he says.

He feels all eyes on the mega event first and then once it concludes, we must start focusing on global peers again towards the latter half of the week. “Because if the market has to have a sustained recovery, both these factors need to be in-sync.”

Here are top 10 trading ideas by experts for the next 3-4 weeks. Returns are based on the January 28 closing prices:

Expert: Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Tata Power: Buy | LTP: Rs 244.05 | Stop-Loss: Rs 220 | Target: Rs 280-300 | Return: 23 percent

The stock is under positive convergence of long-term and short-term SMA moving averages, indicating a strong trend in the stock. On the weekly and monthly charts, the stock is entering a volume and price break-out formation, which is an indication of further upside in the near term.

LIC Housing Finance: Buy | LTP: Rs 383.15 | Stop-Loss: Rs 360 | Target: Rs 445-465 | Return: 21 percent

The stock was in a price-based corrective mode from the highs of Rs 540. However, during the corrective pattern, the stock has formed falling wedge pattern, which is bullish consolidation and would help the stock to trade higher in the near term.

The stock bounced back after hitting the bottom border of the channel, which is positive. On a weekly basis, it has formed bar reversal formation, which is supporting to the broader bullish pattern of the stock.

Above the level of Rs 395, the stock has a scope to move towards Rs 462 levels. Buy at current and more on dips with a final stop-loss at Rs 360 on a closing basis.

Tata Motors: Buy | LTP: Rs 497.30 | Stop-Loss: Rs 460 | Target: Rs 535-550 | Return: 11 percent

The stock has hit a low of Rs 467 and is recovered rapidly. Throughout the week, we saw momentum in the auto sector. Technically, the stock is still below the 10 and 20-day SMAs (simple moving averages), however, it is comfortably trading above the support of 50-day SMA. There are many possibilities to cross the upward barrier, which is at Rs 535.

Buy at current level and more at dip around Rs 475 with stop-loss at Rs 460.

Expert: Nandish Shah, Senior Derivative & Technical Analyst at HDFC Securities

JB Chemicals and Pharmaceuticals: Buy | LTP: Rs 1,759.10 | Stop-Loss: Rs 1,625 | Target: Rs 1,970 | Return: 12 percent

The stock price has broken out from the downward sloping trendline, adjoining the highs of September 28, 2021 and December 31, 2021. Primary trend is positive as stock price is trading above all important moving averages.

The stock price is forming bullish higher top higher bottom formation on the weekly chart. RSI (relative strength index) and MFI (money flow index) Oscillators are placed above 50 levels and in rising mode on the weekly chart, indicating strength in the current uptrend.

IDFC: Buy | LTP: Rs 64.05 | Stop-Loss: Rs 58 | Target: Rs 74 | Return: 15 percent

The stock price has already broken out on the monthly chart by adjoining the highs of March 2015 and July 2021. Stock price is also on the verge of breaking out on the weekly chart.

Primary trend of the stock is positive where it is trading above its all-important short term and long-term moving averages. Accumulation was seen during last few days where volumes are higher on up days as compared to down days.

Polyplex Corporation: Buy | LTP: Rs 1,815.55 | Stop-Loss: Rs 1,700 | Target: Rs 2,000 | Return: 10 percent

The stock price has formed bullish hammer pattern on the weekly chart. Primary trend is positive as stock price is trading above its 100 and 200 day EMA (exponential moving average). Stock price is forming bullish higher top higher bottom formation on the weekly chart. Short term trend also turned as stock price has closed above its 5-day EMA.

Expert: Rajesh Palviya, Vice President – Research (Head Technical & Derivatives) at Axis Securities

Gujarat Ambuja Exports: Buy | LTP: Rs 208.65 | Stop-Loss: Rs 188 | Target: Rs 232-255 | Return: 22 percent

On the weekly chart, the stock has decisively broken out its 6-8 months “multiple resistance” zone on a weekly closing basis. This breakout is accompanied with huge volumes indicating increased participation on a breakout. This stock is trending up across the time frame forming a series of higher tops and bottoms indicating sustained strength.

This strong buying momentum was observed from its 20, 50, 100 and 200-day SMA which reconfirm bullish sentiments. The daily and weekly Band-Bollinger buy signal indicates rising momentum. The daily, weekly and monthly RSI continue to remain bullish along with positive crossover which supports upside momentum.

Investors should buy, hold and accumulate this stock with an expected upside of Rs 232-255, with downside support zone of Rs 188-175 levels.

PSP Projects: Buy | LTP: Rs 575.35 | Stop-Loss: Rs 520 | Target: Rs 640-685 | Return: 37 percent

With current weekly close, the stock has decisively broken out its three years multiple resistance zone on a weekly closing basis along with huge volumes indicating strong comeback by bulls. The daily, weekly and monthly Band-Bollinger buy signal indicates rising momentum.

The stock is well placed above its important moving averages of 100 and 200-day SMA which signifies a strong up trend. Investors should buy, hold and accumulate this stock with an expected upside of Rs 640-685, with downside support zone of Rs 520-500 levels.

Maruti Suzuki: Buy | LTP: Rs 8,550.95 | Stop-Loss: Rs 8,300 | Target: Rs 9,050-9,250 | Return: 8 percent

Since January 2021, the stock was consolidating within Rs 8,380-6,500 levels, however with last weekly close the stock has observed breakout on a closing basis indicating bullish sentiments. This price action has also resulted in “rounding bottom” formation which reconfirm resumption of the earlier upmove.

Huge volumes at breakout zone signals increased participation on a rally. The stock is well placed above its 20-day SMA (Rs 8,059) which remains a crucial support zone. The weekly and monthly RSI continue to remain bullish along with positive crossover which supports upside momentum.

Investors should buy, hold and accumulate this stock with an expected upside of Rs 9,050-9,250, with downside support zone of Rs 8,300-8,000 levels.

Bank of Baroda: Buy | LTP: Rs 103.30 | Stop-Loss: Rs 90 | Target: Rs 120-135 | Return: 31 percent

On the weekly chart, the stock is trending up forming higher tops and bottoms indicating a strong up trend. With current gains the stock is poised for a three year “multiple resistance zone” breakout at Rs 106 levels.

Huge volumes near breakout zone signals rising participation. The stock is well placed above its 100-200-day SMA, which remains a crucial support zone. The daily, weekly and monthly RSI continue to remain bullish along with positive crossover which supports upside momentum.

Investors should buy, hold and accumulate this stock with an expected upside of Rs 120-135, with downside support zone of Rs 90-88 levels.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.