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1 Steel And 1 Electrodes and Graphite Company Stock To Buy For Short Term By ICICI Direct
Indices in trade on October 5, 2021 ended in the green with Nifty closing above 17,800 levels and there is seen some more steam on the Nifty ahead of the RBI's bi-monthly monetary policy statement due later in the week.
Meanwhile, leading research-backed brokerage firm ICICI Direct recommends buying some scrips for short term for gains up to 10 percent. Here are given the stocks rated a 'Buy' by the brokerage house together with the rationale. Typically, these are classified as momentum picks by the brokerage given a buy for a short term of up to 1 month:
1. Tata Steel:
ICICI Direct recommends buying the scrip of steel major at a price of Rs. 1310 for a target of Rs. 1415, i.e. an upside of 8 percent from the stock's last closing price of Rs. 1316.85 per share. Note the stock is a buy for 1-month and stop loss recommended is Rs. 1238.
Technical observations as highlighted by the brokerage for Tata Steel:
• Nifty Metal index after the recent strong outperformance during November 2020 to July 2021 is seen consolidating and forming a higher base in the last two months. The brokerage expects the breather in the metal stocks is approaching maturity and it provides fresh entry opportunity.
• The share price of Tata Steel is witnessing buying demand after forming a higher base around 100 days EMA and the previous breakout area as can be seen in the adjacent chart, thus offers fresh entry opportunity
• "We expect the stock to resume its primary up trend and head higher towards Rs. 1415 levels as it is the 61.8% retracement of the entire last two months breather (1534- 1233)
• The daily stochastic is in up trend and is seen sustaining above the neutral reading of 50 thus supports the positive bias in the stock.
2. Graphite India:
The brokerage has given a buy on the scrip for 14-days period at a price of Rs. 620 for a target price of Rs. 675, an 8.87 percent upside from the stock's last trading price of Rs. 613.05. The stop loss recommended is Rs. 585.
Technical observations as highlighted by the brokerage for Graphite India:
• The share price of Graphite India has witnessed a breather in the last four months and is currently seen forming a higher base at the rising demand line joining the previous major lows of June & August thus provides a favorable risk reward set up.
• We expect the stock to resume up move and head towards 675 levels as it is the 38.2% retracement of the last four months' breather (815-585).
• The stock has already taken four months to retrace just 61.8% of its preceding two months' rally (447-815). A shallow retracement signals a higher base formation and positive price structure.
• The daily 14 periods RSI is seen rebounding after forming a base at the nine periods average has thus supports the positive bias.
Disclaimer
The investment ideas are picked from the brokerage report of ICICI Direct. Investors should note that investing in stocks is risky and neither the author, nor Greynium Information Technologies Pvt Ltd, nor the brokerage would be responsible for losses based on a decision from the above article.
