Given the recent consolidation of the Indian markets following a prolonged upward trend from the previous significant low, backed by strong Foreign Institutional Investors’ (FII) influx, it is a good time to pick some technically strong stocks and capitalize on their upward momentum as the markets continue to ascend.
The fourth week of May series began with our NIFTY 50 index heading towards the level of 18300, mainly backed by the IT and metal stocks. The NIFTY IT index saw intraday gains of approximately 2.50% on a closing basis, slightly falling behind the metal index which rose by 3.19% (closing basis). The banks and financials, however, continued to trade within their short term consolidation range with mild intraday declines.
Best stocks to buy now for short term wealth gains:
1. LTI Mindtree
As indicated in the chart, LTIMINDTREE’s price sharply rose by around 4%, backed by strong buying volumes. The stock has been trading in this wide range for a decently long time now, and given the momentum and volume that can be observed in the last few sessions, traders may expect a good breakout above the level of 5000. It is important to note that a small profit booking move is reasonable to expect considering rally in prices over the past few trading sessions. The short term price structure, however, remains strongly bullish. With an entry at a pullback and a stop loss below the 200 day exponential moving average (EMA), one can try holding the stock for the targets of upto 5300 as per the market conditions.
With a two month long period of consolidation, Vedanta’s price is heading for the breakout of its short term range high, backed by strong sector rally. Traders can look forward to creating positions at a breakout confirmation for a target till at least the 200 day exponential moving average, which translates to the level of around 293. Daily/weekly closing above this level would invite more buyers, eventually leading to the targets of 300-314.
3. Happiest Minds
This mid-cap IT stock has formed a bullish short term price structure following a strong daily closing above its 200-day exponential moving average backed by strong volumes. With a stop loss near the last swing low, the stock can be purchased at current levels and small dips with targets of 920-950-1000 respectively.
4. JSW Steel
With JSW Steel’s prices bouncing off the 200 EMA with elevated volumes following the announcement of its quarterly results, one can look out for buying the stock above the level of 710 with a target till the previous swing high around the mark of 740. Stop loss can be placed below the 200 EMA, breakdown of which would indicate weakness in prices.
(Disclaimer: These trade recommendations are for educational purposes only. Trade at your own risk.)