Top 10 trading ideas by experts for January 2021 series

Indian market closed flat for the week ended December 24 but small & midcap stocks underperformed and closed lower in the holiday-shorted week.

The S&P BSE Sensex closed just a shade below 47,000 while the Nifty50 ended above 13,700 levels. Experts are of the view that as we head towards the close of the year – the momentum could slow down because of the holiday season and investors are advised to remain stock-specific.

The new strain of the coronavirus did trigger volatility in the world equity market but recovered well assuming lower risk in the future and start of vaccination and $900 billion US stimulus.

The market could remain volatile ahead of the monthly expiry on 31st December, as investors would roll over positions from December series to January 2021 series.

“For the week ahead, concerns regarding the fresh case of the virus will remain in the limelight along with development on Brexit deal,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“Investors should stay focused on quality sectors & counters and also watch at the trend of FII inflows, which is the main factor of the recent rally, no eventful data and announcements are expected next week,” he said.

On a net basis, FIIs have been buyers in Indian equities during December to the tune of USD7.5Bn even after lifetime high flows witnessed in November 2020, said a Kotak report.

Here is a list of top 10 trading ideas by experts for the next 3-4 weeks:

Expert: Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking

Biocon | Buy | LTP: Rs 481.25 | Target price: Rs 518 | Stop loss: Rs 458| Upside 7%

Last week’s recovery was mainly led by the marquee defensive themes and pharma was one of them.

Due to last week’s smart up move, many counters from this space registered fresh record highs.

Biocon did not stay behind as we witnessed a good price-volume breakout last Wednesday from the multiple resistance zone around Rs 480.

A small pullback on the following day has made it more attractive when it comes to the risk-reward ratio.

Looking at the upward sloping RSI-Smoothened oscillator, we expect the stock to do extremely well after entering uncharted territory.

IndusInd Bank | Sell | LTP: Rs 850.95 | Target price: Rs 805 | Stop loss: Rs 874| Downside 5%

This private bank stock has been underperforming significantly in pre-COVID times as well. However, we have witnessed some recovery in it over the last few months along with the broader market.

Last week, the stock saw some decent profit-booking, which was due for the recent rally.

The market did well after last Monday’s hiccups but this stock did not have enough strength to recover its losses.

The daily chart exhibits a bearish crossover in the combination of two key short-term moving averages i.e. 5 and 20.

We may see some further correction in the coming week as well.

Expert: Gaurav Garg, Head Research, CapitalVia Global Research Limited.

Hindustan Unilever Ltd: Buy| LTP: Rs 2399| Trigger: Rs 2410| Target: Rs 2545| Stop Loss: Rs 2303| Upside 6%

The stock formed a bullish flag pattern, and if the stock somehow sustains above Rs 2410 might lead the stock to positive momentum. The stock has seen a significant addition of volumes in recent days especially in FMCG stocks.

The stock is showing strong momentum and in the coming week, the stock might stretch towards life high levels.

ICICI Lombard General Insurance Company Ltd: Buy| LTP: Rs 1484| Trigger: Rs 1495| Target: Rs 1605| Stop Loss: Rs 1442| Upside 8%

The stock has formed a bullish flag pattern on the daily charts, and if the stock somehow sustains above 1495, and it might lead the stock to positive momentum.

The stock has been trading in a consolidation range for the last few weeks, Insurance stocks have been gaining momentum in recent days, and ICICIGI might show strong bullish movement in the next few weeks.

Expert: Shabbir Kayyumi is the Head of Technical Research at Narnolia Financial Advisors Ltd

Federal Bank: Buy Around Rs 63 | Target: Rs 75 | Stop Loss: Rs 55 | Upside: 20 percent

The stock has maintained a strong base near Rs 55-57 zone and current sustainability above all significant averages has improved the bias with a positive candle formation on the daily chart with higher highs-lows from three consecutive days.

The RSI also has indicated a trend reversal to signal a buy. With the chart looking attractive, we suggest buying this stock around Rs 63 for a target of Rs 75 & Rs 78, while keeping the stop loss of Rs 55.

Indian Oil Corporation: Buy Around Rs 88 | Target: Rs 105 | Stop Loss: Rs 83 | Upside: 19 percent

The stock saw a decline from Rs 97 to Rs 84. Since then, it has been making higher trough and higher crests indicate upward swing from lower levels. On the weekly chart, the stock has formed a Hammer candlestick reversal pattern.

Volumes have been high at lower levels, indicating accumulation in the stock. MACD has given a positive crossover with its average above equilibrium level of zero on the daily chart. Thus, stock can be bought at around Rs 88 levels with stop loss below Rs 83 for a target of Rs 98 and Rs 105 levels.

Sun Pharmaceutical Industries: Buy Around Rs 585 | Target: Rs 640 | Stop Loss: Rs 550 | Upside: 10 percent

This counter appears to have registered a clean break out with a close above its multi-week consolidation zone on the weekly line chart. A strong bullish candle with decent volume is showing more upside moves in the coming sessions.

If the stock closes above Rs 595 levels, it should eventually head higher towards its initial range breakout target of Rs 640.

For the time being, positional traders are advised to buy around Rs 585 into this counter for a target of Rs 640, with a stop below Rs 550 on a closing basis.

Expert: Ashis Biswas is the Head of Technical Research at CapitalVia Global Research

REC: Buy above Rs 144 | LTP: Rs 134| Target: Rs 168 | Stop Loss: Rs 124| Upside 25%

This stock has given a trend line breakout and witnessed some good amount of correction. It is trading above its important moving averages.

And, any breakout above the level of Rs 144 would add further upward momentum to the stock. We recommend initiating a long position above Rs 144 with a stop loss of Rs 124 and Rs 168.

HEG: Buy Above Rs 951| LTP: Rs 885| Target: Rs 1,160 | Stop Loss: Rs 785| Upside 21%

This stock has formed a reversal kind of pattern on its daily charts and trading above its important moving averages. It is also supported by a trend line breakout.

Any breakout above the level of Rs 951 would add further upward momentum to the stock. We recommend initiating a long position above Rs 951 with a stop loss of Rs 785 and Rs 1,160.

HSIL: Buy| LTP: Rs 110| Target: Rs 132| Stop Loss: Rs 100| Upside 20%

The stock closed at Rs 110.80 on 24th December 2020. It made a 52-week low at Rs 32.70 on 25th March 2020 and a 52-week high of Rs. 114.85 on 24th December 2020. The 200-Days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 73.22.

The short-term, medium-term, and long-term biases are looking positive for the stock as it is trading in higher highs and higher lows on charts.

Apart from this, it has formed a “Bull Flag” pattern on weekly charts and has given the breakout of the pattern along with high volumes, so, buy8ing momentum may continue for the coming days.

Therefore, one can buy in the range of 108-110 levels for the upside target of 128-132 levels with a stop loss below 100. The time horizon could be in the range of 1-2 months.