Constructive on markets, 2 stocks to buy now: Sudeep Shah

Sudeep Shah, Head of Technical & Derivatives Research (Equity & Currency), SBI Securities, says “given the kind of up move that we have witnessed from 21,800 right up to 22,700, if the markets consolidate here, it would be a nice thing and going forward 22,450, 22,500 will act as a strong base. Till the 22,450-22,500 zone holds, we could see this up move extending up to 22,950-23,000 in the next few sessions.”

Shah also says: “I feel Aditya Birla Capital from a medium-term perspective can be bought with a stop loss at Rs 200 on the downside and Rs 220 on the upside. The second stock that we like is MCX.”

What do you make of the market setup because after that big runup that we have seen for the last three consecutive sessions, do you see some sort of topping out for the market right now or do you see more legs to this?
Sudeep Shah: What we are witnessing in the markets is that overall the indices are in an uptrend, but global cues of rising dollar index, we have been witnessing the US 10-year bond yields also rising in the last few sessions and the inflation numbers which have come higher than expected. Now, all these have led to some kind of resistance at higher levels if we see into the global equity markets now. So, overall, the markets might consolidate here at these levels and it is okay if they consolidate because given the kind of up move that we have witnessed from 21,800 right up to 22,700, if the markets consolidate here, it would be a nice thing and going forward 22,450, 22,500 will act as a strong base. Till the 22,450-22,500 zone holds, we could see this up move extending up to 22,950-23,000 in the next few sessions.

So, overall, we are constructive about the markets given the way the midcaps and the overall market breadth has shaped up. So, buy on dips and buy on selective stocks is what we feel would be the key going forward.

What are your own recommendations right now? What charts look interesting?
Sudeep Shah: There are a couple of charts which are looking interesting. A case in point is Aditya Birla Capital. The stock was consolidating in a symmetrical triangle since eight to nine months and I guess in early April, we have seen a breakout above 185, 190 levels and since then all the dips have been bought and last five-six sessions if you see the stock was consolidating between 200 and 205 and today we have seen a volume based breakout here and a rise in open interest also. I feel Aditya Birla Capital from a medium-term perspective can be bought with a stop loss at Rs 200 on the downside and Rs 220 on the upside.

The second stock that we like is MCX. The stock has been in an uptrend since June 2023. It faced minor retracement towards the end of March and post that, once again it is trending on the upside and the momentum is picking up. The stock has crossed its intermediate swing highs of Rs 3,800, 3,850 which were there in February and March. I guess the trend is quite strong here and MCX can be bought with a stop loss of Rs 3,980 on the downside and a target of Rs 4,150, 4,200 on the upside.

What looks good within pharma because a lot of these smaller names are perking up? I am not sure if you track the likes of Entero, etc, because of their recent listing, the time horizon might not be enough, but Neuland Labs, Concord Biotech are doing quite well. Any midcap, smallcap pharma name that is coming up on your radar?
Sudeep Shah: One such stock, Concord Bio, is looking good now. It has consolidated since the last three, three-and-a-half months between 1,550 and 1,350 on the downside and today we have seen a breakout here. I feel, overall the kind of consolidation we have seen and the volume based breakout that we are witnessing today this stock could do well in the coming few weeks. So, overall, someone holding this stock can continue to hold this with a Rs 1,540 stop loss on the downside and Rs 1,800, 1,850 target on the upside.