Synopsis: Angel One, a prominent brokerage, has offered insights into the current market conditions, noting that the recent correction phase is likely not over yet. The brokerage firm advises traders to adopt a cautious approach, avoiding aggressive trades and instead gradually accumulating high-quality stocks during this volatile period.
With the festive season approaching, Angel One has issued guidance on navigating the ongoing market correction, which they expect to continue in the short term.
They recommend that traders adopt a conservative strategy, focusing on "gradual accumulation" of quality stocks rather than aggressive trades.
In particular, Angel One has identified four stocks they consider to be fundamentally strong and technically sound, based on their monthly performance charts and long-term potential.
Bharat Heavy Electricals Ltd (BHEL):
'BHEL' has shown a steady consolidation following a rally within the public sector (PSU) space.
The stock has encountered three months of profit-taking, now positioning itself around the 20-EMA on the monthly and 89-EMA on the weekly charts, indicating potential for a medium-term recovery.
Angel One suggests that BHEL presents an attractive accumulation opportunity within the range of Rs. 230-Rs. 220, with a target price of Rs. 295 and a stop-loss at the Rs. 198 resistance level.
This approach underscores the importance of gradual accumulation in anticipation of the stock’s next uptrend.
Care Ratings Ltd:
In a generally weak market environment, 'Care Ratings' has maintained a strong relative performance, showing resilience by forming a stable base near its 38.2% retracement level.
The stock has recently broken out of this base with robust candlestick patterns and strong volume support, suggesting solid buyer interest.
Traders are advised to consider buying Care Ratings on any dip within the Rs. 1,380-Rs. 1,320 range, aiming for a target of Rs. 1,660 and setting a stop-loss at Rs. 1,250.
Snowman Logistics Ltd:
Angel One has observed that 'Snowman Logistics' has reversed its previous downtrend, breaking through both a descending trendline and a double bottom formation on weekly charts.
This positive breakout is reinforced by higher highs and lows, along with substantial trading volume, which implies a sustainable upward momentum.
The brokerage recommends an entry in the Rs. 64-Rs. 60 range, targeting Rs. 91, with a stop-loss positioned at Rs. 47.
Tata Consultancy Services Ltd (TCS):
TCS, a giant in the IT sector, has seen notable profit-taking since mid-September, correcting from the Rs. 4,600 level.
Currently, the stock hovers around its 200-SMA on the daily chart, coinciding with a key Fibonacci retracement level (61.8%) from its previous uptrend.
Angel One views this as an optimal moment for short-covering with an appealing risk-to-reward profile.
They recommend purchasing TCS in the Rs. 4,000-Rs. 3,900 range, with a target of Rs. 4,780 and a stop-loss set at Rs. 3,580.
In conclusion, in light of continued market volatility, Angel One encourages investors to adopt a measured, staggered accumulation strategy rather than pursuing aggressive bets.
By carefully selecting fundamentally solid stocks, such as BHEL, Care Ratings, Snowman Logistics, and TCS, investors may navigate current market fluctuations and position themselves for potential growth over the medium to long term.
As always, investors are urged to consult financial advisors to tailor these insights to their unique financial goals.
Disclaimer: This article provides market insights and stock recommendations for informational purposes only. It should not be considered financial advice. Please consult a qualified financial advisor before making any investment decisions.
