The Indian stock market had a volatile trading session on Thursday, with the benchmark indices trading in a tight range for most of the day before the Sensex came under sharp selling pressure in the last minutes of the day. The Sensex fell nearly 417 points from 3:15 pm to 23,900 levels at the close of the auction, and the Nifty 50 was below 23,900.
Despite the overall market’s loss, some stocks were showing some positive technical signals. Sachin Gupta, Vice-President of Technical Research at Choice Equity Broking, has issued buy recommendations on Capri Global Capital, Phoenix Mills and Engineers India.
In the brokerage's technical assessment, all three stocks are showing strength above important technical levels. Based on the recommended entry levels and target prices, Capri Global Capital has the highest potential upside of around 12%, followed by Engineers India at nearly 10% and Phoenix Mills at more than 7%.
But these are technical-analytical-based recommendations, and actual returns may differ depending on market conditions.
Capri Global Capital: target Rs 305
Thursday's close price: Rs 272.10
Capri Global Capital (CGCL) has been showing strong momentum on the daily chart and has been on the way up into a new swing high. The stock is still showing higher highs and higher lows, which is a common sign of a robust bullish trend.
The stock is above its 20-day, 50-day, 100-day and 200-day exponential moving averages (EMAs). This alignment of moving averages indicates sustained technical strength.
The Relative Strength Index (RSI) is at 67.93, very positive, but still below the much-watched 70 level.
Sachin Gupta has recommended buying the stock at Rs 272 and a target price of Rs 305. At these levels, the potential upside is about 12.13% for the stock.
Phoenix Mills: target Rs 2,100
Close price of the stock: Rs 1,958
Phoenix Mills also has momentum in development after a bullish breakout from a consolidation pattern. The stock is starting from a good base around its 100-day EMA, and momentum is beginning to show.
The shares are above the 20, 50, 100, and 200 EMAs, which means that the overall technical structure is still favorable.
The RSI is up to 55.62, which is an improvement in buying interest without entering a very overbought region.
The brokerage has suggested buying Phoenix Mills at around Rs 1,960 with a target of Rs 2,100, and this would have a potential upside of around 7.14% from the recommended buy level.
Engineers India: target Rs 310
The closing price on Thursday was Rs 280.80
Engineers India has broken above important multi-month resistance levels and formed fresh swing highs. The breakout, together with increased trading volume, indicates that market participation is getting stronger.
The stock is trading above its key moving averages and 20-day, 50-day, 100-day, and 200-day EMAs, which are very positive and support the good technical outlook.
Its RSI is 72.48, and the momentum is very strong. But an RSI above 70 can also trigger a stock to be in an overbought area, and that is why we need to keep track of the price.
Gupta has recommended buying Engineers India around Rs 282 with a target of Rs 310. Based on the recommended entry and target, the potential upside is around 9.93%.
What Technical Indicators Say
In all three stocks, one common component is that they are above key EMAs. Capri Global Capital and Engineers India are above strong resistance points, and Phoenix Mills is breaking out after a period of consolidation.
The RSI readings also point to positive momentum in the three counters. But technical indicators are not necessarily predictive of future performance. The stock price can be affected by market sentiment, company-specific developments, economic conditions, and overall index movement.
Potential Upside at a Glance
Based on the brokerage's suggested buy levels and targets:
| Stock | Buy Level | Target Price | Potential Upside |
|---|---|---|---|
| Capri Global Capital | Rs 272 | Rs 305 | 12.13% |
| Engineers India | Rs 282 | Rs 310 | 9.93% |
| Phoenix Mills | Rs 1,960 | Rs 2,100 | 7.14% |
The three recommendations are for stocks with good technical profiles in the context of volatility in the market. Of these stocks, Capri Global Capital has the highest projected upside, according to the targets.
The brokerage targets are forecasts based on technical analysis and do not guarantee returns. In the stock market, investors are subject to market risk and should have some level of risk tolerance, investment horizon, and financial objectives before they make any investment. Traders should also take the stop-loss levels suggested by the analyst into account.
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