The Indian equity market appears to have skipped the traditional year-end 'Santa Claus rally' in 2024, weighed down by persistent global uncertainties and a lack of fresh domestic catalysts. The benchmark Nifty 50 index fell by 100 points, or 0.38%, to close at 25,942 on Monday, marking its third consecutive session of losses.
Market Context and Missed Rally
Historically, a Santa Claus rally occurs during a seven-day trading window encompassing the last five sessions of December and the first two of January. This year, the momentum has been absent. On a monthly basis, the Nifty is down approximately 1% in December (till the 29th), poised to break a three-month winning streak. Despite the recent pullback, the index has managed to secure a year-to-date gain of around 10%.
Analysts anticipate continued volatility as the market gears up for the third-quarter earnings season. Investor attention is also divided between global developments and potential hints regarding a comprehensive India-US trade deal. In this environment, experts characterize the current phase as a 'stock-pickers market,' advising investors to focus on individual scrips with robust technical indicators for short-term opportunities.
Expert Stock Picks for 1-2 Weeks
Two market technicians, Vishnu Kant Upadhyay of Master Capital Services and Hitesh Tailor of Choice Equity Broking, have recommended six stocks for potential gains over the next one to two weeks. Their analysis is based on chart patterns, moving averages, and momentum indicators.
Recommendations from Vishnu Kant Upadhyay
Tata Consumer Products: Upadhyay suggests a buy at ₹1,195, with target prices of ₹1,285 and ₹1,310. A stop loss is advised at ₹1,130. He notes a strong bullish setup on daily charts, with the stock trading above all key exponential moving averages and breaking out from a falling trendline resistance.
Bikaji Foods International: The recommendation is to buy at ₹758, targeting ₹816, with a stop loss at ₹717. The stock shows an improving structure, having rebounded from its 200-day EMA and forming a rounding bottom pattern, indicating a potential trend reversal.
Federal Bank: Upadhyay recommends buying at ₹263, for targets of ₹275 and ₹280. The stop loss should be placed at ₹254. The bank's stock exhibits a strong bullish trend with a sharp upside breakout from consolidation, supported by rising volumes.
Recommendations from Hitesh Tailor
Tata Communications: Tailor advises buying at ₹1,800, aiming for a target of ₹1,960. The stop loss is set at ₹1,725. The stock is showing strength after finding support near its 100-day EMA, with the RSI hinting at a bounce from near-oversold levels.
BPCL: The call is to buy on a breakout above ₹374 with volume, for a target of ₹405. A stop loss of ₹355 is recommended. BPCL is displaying a higher high-higher low structure and trades above all major EMAs, with a healthy RSI reading.
Dr. Lal PathLabs: Tailor suggests buying at the current level of ₹1,428.20, targeting ₹1,520. The stop loss is placed at ₹1,380. The stock is trading within a demand zone, has broken out from sideways consolidation, and its RSI suggests improving momentum from oversold territory.
Investment Outlook and Caution
The overarching theme from experts is the need for selective stock-picking in a market lacking broad-based directional momentum. The recommended stocks are identified based on their technical posture, suggesting potential for short-term upside. However, investors are reminded that all market views and recommendations are for educational purposes. Market conditions are dynamic and can change rapidly.
It is crucial for investors to consult with certified financial experts and consider their own risk appetite before making any investment decisions. Disciplined risk management, through the use of prescribed stop-loss levels, is emphasized to protect capital in volatile conditions.
