3 Top Growth Stocks to Buy in January

With nearly every U.S. major stock index at or near all-time highs, it's becoming increasingly difficult to find attractively priced growth vehicles. But not impossible: When we asked three Foolish investors to name some outstanding growth opportunities available in this frothy market, they delivered. Their picks -- clinical-stage biotech Novavax (NASDAQ:NVAX), food products giant Hormel Foods Corp. (NYSE:HRL), and fast-food franchise titan Carrols Restaurant Group (NASDAQ:TAST) -- all sport stellar long-term growth projections, arguably making them worthwhile buys to kick off 2018.

On the mend

George Budwell (Novavax): Novavax has started to show signs of recovery after a painful 2017. The synthetic-vaccine maker's stock is already up by 57% less than two full weeks into the new year. Even so, I think the best is yet to come for this once-forgotten biotech stock. 

Why? Novavax now has two major clinical catalysts on the calendar this year that could light fires under its share price. First up, the company is expected to roll out new data for its experimental flu vaccine, known as NanoFlu, in February. In a nutshell, Novavax is attempting to bring a more consistent flu vaccine to market for older adults.

While the company hasn't made any specific claims in regard to potential peak sales, the global flu vaccine market is estimated to worth more than $3 billion in annual sales. Given that the biotech's market capitalization was only $627 million at the time of writing, if NanoFlu grabbed even 10% of that market, it would be a big winner for the company.

Novavax also provided an encouraging update for its ongoing phase 3 maternal immunization study against respiratory syncytial virus (RSV). Based on an informational analysis, the experimental vaccine appears to have a better-than-average shot at meeting its primary endpoint in this pivotal trial. The company said an interim analysis is slated to be released in the fourth quarter; that could be the first step toward a regulatory filing in perhaps late 2019. If it's successful, Novavax believes this vaccine could generate global peak sales of around $1.5 billion annually. 

In all, Novavax has multiple irons in the fire this year, potentially setting it up for a quick turnaround. 

Growth on the menu

Reuben Gregg Brewer (Hormel Foods): Hormel Foods' dividend yield is around 2.1% now, which is toward the high end of its historical range. That's one indication that investors have a rare opportunity to buy into this leading food manufacturer at what appears to be a fair price. The reason for the relatively high yield is an ongoing shift in consumer tastes that is putting pressure on the top and bottom lines of food makers.

For example, Hormel's sales and earnings were off by 4% each in fiscal 2017. However, if you strip out the impact of acquisitions and divestitures, organic sales were up 3%. Meanwhile, management says it expects fiscal 2018 earnings to advance by as much as 8%. That's impressive in the typically boring food industry.   

Driving those projections are the company's moves to adjust to its customers' changing desires. That's included selling slower-growth businesses like specialty meat brand Farmer Johns, buying the Ceratti brand to expand into South America, acquiring Columbus Craft Meats to grow its presence in the deli aisle, and adding Fontanini Italian Meats and Sausages to augment its food service business. Most of these moves took place in the past 12 months, making fiscal 2017 something of a transitional year.   

But such changes aren't out of the norm; Hormel regularly adjusts its portfolio to keep itself in line with the trends. As an industry-leading food maker (it has the No. 1 or No. 2 position in 35 categories), it offers a long history of growth at a reasonable price. But the best evidence of the company's success is probably its astounding 52 consecutive years of dividend hikes.

A juicy stock to bite into

Rich Duprey (Carrols Restaurant Group): Across all restaurant categories, foot traffic remains a concern -- and industry analysts at NPD Group predict it will remain pretty much flat in 2018, just as it did in 2017. However, the quick-service segment is expected to achieve 1% year-over-year growth compared to a 2% decline at full-service chains.

That bodes well for Carrols Restaurant Group, the country's largest Burger King franchisee, which continues to serve up  quarter after quarter of same-store sales growth. In its third-quarter earnings report, it said comps grew a phenomenal 7.5%, thanks to a 4.8% rise in average guest check and a 2.7% increase in traffic. Similarly, both Wendy's (NASDAQ:WEN) and McDonald's(NYSE:MCD) reported higher comps and traffic. It appears McDonald's may soon be able to end its string of four consecutive years of customer losses.

Yet Carrols is experiencing growth rates at least twice as strong as the others are achieving. It has been hindered by rising commodity costs, which caused it to slightly lower its adjusted EBITDA for the year, but that's a factor largely out of its control.

Carrols Restaurant Group remains an excellent growth stock. It trades at less than 24 times trailing earnings, meaning its P/E to growth rate ratio, is less than 1 -- an attractive attractive ratio indeed. It also trades at a fraction of its sales, and at only seven times its free cash flow, the Burger King franchisee is a bargain-basement stock to boot.

MORE WILL UPDATE SOON!!

My top 10 stocks for 2018

The stock market is at record highs. The S&P is nearly at an eye-popping level of 2,700 — with some analysts predicting that it will hit 3,000 by Saturday.

This bull market is the second longest ever with over eight years of rising stock prices. But will the good times keep rolling in 2018?
The following is my Top 10 for 2018, listed in alphabetical order. Prices are as of the December 19 close. This year's Top Ten represent a nice combination of growth and defensiveness. Seven of the 11 S&P 500 industry sectors are represented, and their average long-term estimated growth rate (in earnings per share) is well in excess of the overall market. On average, these companies are much larger than the average S&P 500 company while carrying an average dividend yield of about 2.1 percent.

 

Top Ten for 2018

Bristol-Myers Squibb (BMY)

Bristol-Myers is a global biopharmaceutical company and a juggernaut in the area of immunotherapy. The company should benefit from continued growth of its primary drugs, Opdivo and Eliquis, as each have several years remaining on their respective patents. The company also has a promising pipeline of new drugs. Furthermore, an aging populating and increased spending on healthcare should act as tailwinds well into the future for the company. BMY has a strong 'A' rated balance sheet which gives the company the flexibility to make acquisitions to expand its revenue base over time.

We expect sustained double-digit earnings growth over the next 5 years, and this growth should not be particularly economically sensitive. The stock trades at 19 times the consensus for calendar year 2018 earnings per share, which represents a slight premium to the S&P 500. In addition, the stock offers a 2.6 percent dividend which should also grow over time.

ExxonMobil (XOM)

ExxonMobil is an integrated oil company. Its business starts with the exploration and production of crude oil and natural gas and then moves to the production of petroleum products, and finally to the transportation and sale of crude oil, natural gas and petroleum products.

The stock performance has lagged the broader S&P 500 by a significant percentage despite improving commodity prices. The company has historically generated strong returns on average capital employed through its relatively low exploration and development costs and superior project management. This point is often lost on investors chasing shale companies. Many that claim to be profitably drilling for oil in the US are only counting the cost to produce oil and exclude the cost of acquiring and developing the land.

The reset in commodity prices has forced companies to find ways to live within their cash flow, and ExxonMobil reached free cash flow neutrality (cash from operations covers capital expenditures, dividends, and any share repurchases) in 2017. Additionally, the company may benefit from policy changes that open more drilling areas or improve relations with Russia. The stock trades at 20 times estimated calendar year 2018 earnings per share. The stock also offers a 3.7 percent dividend yield.

FedEx (FDX)

FedEx has made great strikes in restructuring its Express unit to reflect changing customer preference away from expensive overnight air deliveries and toward more economical Ground deliveries. At the same time, the company has been investing aggressively in its Ground network, enabling it to grow that business at very rapid rates in recent years. Meanwhile, the company is in the process of integrating its largest-ever acquisition – a $4.8 billion deal to acquire TNT Express, which will vastly expand the company's presense and scale in Europe and create big opportunities for expense and revenue synergies.

Within its three major business segments – Express, Ground and Freight – the company has proven extremely adept at managing package volumes and yields to optimize profits and returns rather than focusing simply on yield, package volume or revenue maximization. This expertise, along with a vast delivery network that has taken 40 years to establish, ensures that FedEx can grow profitability even in the event that an aggressive new competitor (Amazon.com) seeks to participate in the massive growth potential of e-commerce. The stock trades at just 17 times the consensus estimate for calendar year 2018 earnings per share, which is a significant discount to both UPS and the S&P 500. The yield is 0.8 percent.

Goldman Sachs (GS)

Goldman Sachs is arguably the premier global investment bank, with consistently high revenue share in equity offerings and mergers & acquisitions, as well as a growing presence in fixed income. However, the company's trading arm, which typically accounts for an outsized 40 percent-50 percent of total company revenue, has been beset by low market volatility and heightened regulatory scrutiny following the passage of the Dodd-Frank Act in 2010. As a consequence of these pressures, the company's returns on equity have struggled to cover its cost of capital in recent years.

Looking forward, we expect the environment to improve. The Trump administration is actively working to reduce the regulatory burden on financial institutions, to include possible liberalization in the Volcker Rule (which restricts covered institutions from making proprietary investments) as well as liberalization in the capital and liquidity requirements that have resulted in depressed returns on equity.

At the same time, we believe that the recent lack of market volatility reflects a complacency that could be long in the tooth. Finally, the company is working to aggressively diversify its revenue base away from trading operations. At current levels, the stock is trading at just 1.3x book value, which would suggest that the low current ROE's will persist. As such, we think there is solid upside in the event that ROE's improve.

Medtronic (MDT)

Medtronic is a diversified global medical-technology company that operates through four segments: Cardiac and Vascular Group, Minimally Invasive Technologies Group, Restorative Therapies Group, and Diabetes Group. With sales in over 120 countries, the company has geographical scale that is hard to duplicate.

MDT has faced a variety of headwinds in 2017, including natural disasters and IT disruptions, but we expect its new product cycle to drive top-line growth in 2018. Moreover, management has cost-saving initiatives in place that will help boost the bottom line.

The stock trades at just 16 times calendar year 2018 earnings per share, which represents a discount to both its peer group and the S&P 500. We view this stock as an attractive holding for long-term investors, especially given that we believe earnings should continue to grow in a down market. The company also offers a 2.2 percent dividend.

Microsoft (MSFT)

Microsoft is one of the largest technology companies in the world. It has successfully pivoted from a Windows PC-first world to the cloud where its focus on productivity and business processes is paying dividends.

As part of this change in focus, the company has moved from one-time licensing fees (the customer owns the software) to subscription-based sales which, for a monthly fee, allows customers to always have the latest version of the software. This transition negatively impacted revenues and cash flow over the last couple of years.

However, cash flows reached an inflection point in 2017, and the subscription base is now large enough to more than make up for the lost up-front cash generated under the one-time licensing model. We believe the company can grow free cash flow by double digits over the next few years which should support its valuation. The stock trades at 24 times the calendar year 2018 earnings per share estimate with a free cash flow yield north of 5 percent.

Ross Stores (ROST)

Ross Stores operates in the off-price channel, which has been one of the few bright spots in the retail sector over the past couple of years. As many department stores have struggled and closed stores, ROST is expanding its 1,627 store base at 6 percent per year, and management sees potential for 2,500 stores over the long-term.

Unlike most specialty retailers and department stores, ROST does not require fashion or product innovation to drive profits. Instead, access to inventory and quick turnover of merchandise drives traffic, which grows sales and allows the company to leverage operating costs. They are able to purchase inventory at a 20 percent-60 percent discount with the vast majority coming from manufacturers that have over-produced or had orders cancelled.

All of this leads to a "treasure-hunt" experience for customers that is difficult to replicate in an online setting, and this drives loyalty and repeat visits. ROST has only failed to grow earnings per share in 3 years since 1988 and their ability to grow earnings during the last 2 recessions shows that the company has historically been less susceptible to a market downturn.

ROST trades at 22 times on a calendar year 2018 basis which represents a premium to both peers and the S&P 500. Having said this, we think this stock deserves the higher valuation given its strong cash flow generation, resilient balance sheet, and ability to generate double digit earnings per share growth. The dividend is 0.8 percent.

Schlumberger (SLB)

Schlumberger is the world's premier oil services company providing the broadest range of services to companies in the oil and gas exploration and production business. We believe the company is ideally positioned to benefit from higher energy prices and increasing service intensity in the exploration and production of oil and gas.

This company has less exposure than peers to the more volatile North American market and more exposure to international markets, which tend to have longer and steadier cycles. International activity levels are near a bottom. Additionally, the company has spent the past couple of years streamlining its operations to improve efficiency.

If management's claims are correct that pricing improvements can drive 65 percent incremental margins ($0.65 of operating earnings on each $1 increase in revenue), we estimate that the company could reach its peak profit level by recovering just half of the revenue decline witnessed since oil prices reached a top in the summer of 2014. The shares trade at 29 times the consensus estimate for calendar year 2018 earnings per share with tremendous earnings recovery potential should energy prices remain stable or move higher.

Starbucks (SBUX)

Starbucks is the premier roaster, marketer and retailer of specialty coffees in the world, with over 27,339 stores in 75 countries. Following several years of very strong earnings growth, the stock has been flat over the past 2+ years due mostly to a deceleration in same-store sales growth to the low-single digits from the mid- to high-single digits it had been reporting for years. Management has attributed the deceleration to both a difficult consumer/retail backdrop as well strong customer acceptance of the company's new mobile order & pay solution, which has caused a bottleneck in filling customer orders in a timely fashion.

We think this is a high-class problem, and that this temporary setback creates an opportunity for growth-oriented investors willing to be patient. The company's recently revised long-term growth algorithm calls for 12 percent+ annual earnings per share growth driven by high single-digit revenue growth, 3-5 percent global same-store sales growth, and annual returns on invested capital of at least 25 percent.

We also anticipate that the company can continue growing its global store base by 7 percent-8 percent annually, driven by outsized growth from relatively under penetrated China. Recent sizeable investments in new platforms, products, people and technologies should help enable success in hitting these targets. The stock trades at a 24 times the consensus for calendar year 2018 earnings per share, which is a discount to similar companies. The dividend is 2.1 percent.

United Technologies (UTX)

United Technologies is a diversified industrial company that provides products and services to the building systems and aerospace industries worldwide. The company's aerospace segments target both commercial and government (including both defense and space) customers.

The company has an enviable long-term track record of financial performance, with strong double-digit earnings per share growth, outstanding cash generation, and a rock-solid balance sheet. However, recent performance has been held back by development costs for the company's ground-breaking new geared turbofan (GTF) jet engine as well as increasing competition and pricing pressure in Europe and China for Otis elevators (both equipment and service).

We think the company is taking the appropriate action to improve performance in these two areas. Once through the current investment phase, we think the company can ultimately return to sustainable double-digit earnings per share growth. Based on those expectations, we continue to believe the company offers strong value for long-term investors, trading at less than 19 times estimated calendar year 2018 earnings per share – roughly in line with the overall market. In addition, the current dividend yield is an attractive 2.2 percent.

MORE WILL UPDATE SOON!!

Sensex @ highs, inches closer to Mount 35K! 10 stocks which could give up to 40% return

The rally is not over and investors should maintain their long positions on the Nifty as the rally is likely to stretch towards 11000 ahead of the Budget, suggest experts.

Tracking gains registered on Wall Street, Asian markets along with Indian markets started on a high note. The S&P BSE Sensex rallied over 300 points to hit a fresh record high of 34,963 and was just 40 points away from hitting Mount 35K.

The Nifty surpassed its crucial resistance level placed around 10,700 and 10,750 to record a fresh high of 10,782. The rally is not over and investors should maintain their long positions on the Nifty as the rally is likely to stretch towards 11000 ahead of the Budget, suggest experts.

We have collated a list of stocks from various brokerage firms which investors could buy now or on dips for a potential upside of up to 40% in next 12 months:

ICICI Prudential Life Insurance Company: BUY| Target Rs 450| Return 11%

Geojit Financial Services initiated buy on ICICI Pru with a 12-month target price of Rs 450 as the outlook on the Indian life insurance sector remains bright. The Indian life insurance industry is on the cusp of enormous growth.

ICICI Pru Life Insurance is well-positioned to capture the strong growth and is the best play on the life insurance sector. The domestic brokerage firm expects the company to deliver 22 percent and 15 percent in return on equity and return on enterprise value in the next financial year, said the report.

It expects the new business premium to grow at a compounded rate of 20 percent over the fiscal years through March 2019. It remains an outperformer in the private life insurance despite challenging business environment.

Gujarat Pipavav Ltd: BUY| Target Rs 174| Return 9%

HSBC upgraded the stock from hold to buy and also raised its target price to Rs174 from Rs144 earlier. Gujarat Pipavav is set to receive another two weekly services. The rebound in India-China EXIM trade bodes well-given exposure to the Far East.

The earnings momentum is likely to resume an upward trend in the near future. This service wins along with improved trade outlook raised earnings estimate, said the report.

Himadri Speciality: BUY| Target Rs 245| Return 30%

ICICIdirect initiated a ‘Buy’ on Himadri Speciality with a price target of Rs 245. The growth visibility is healthy with impressive capex and firm financing plans amid robust product demand.

The debt is at a controlled level, and the debt-to-equity ratio has declined steadily. The brokerage house expects revenue, operating income, and net profit to grow at a compounded rate of 22.7 percent, 29.3 percent, and 38 percent respectively over the financial years through March 2020.

Himadri is one of the only few listed players with exposure to Electric Vehicle.

Infosys Ltd: BUY| Target Rs 1300| Return 20%

CLSA maintains a buy on Infosys post Q3 results and raised its target price to Rs1300 from Rs1230 earlier. Previous quarter’s revenue growth was in-line with estimates and steady margins.

Tax cuts drove the next two financial year’s earnings per share estimates by 2 percent.

Client mining stayed strong with solid growth in the top client. Impressive margin performance continues despite hikes and variable pay, said the note.

Persistent Systems Ltd: Outperform| Target Rs960| Return 23%

Credit Suisse maintains an outperform rating on Persistent Systems with a target price of Rs960. The company is an attractive digital play.

Persistent Systems transformed itself to address the larger enterprise digital opportunity. The brokerage firm expects digital exposure to be at least 40 percent and non-linear revenue to be 25 percent.

Increasing share of high-growth businesses is likely to drive overall growth, said the note. It expects strong earnings revival over FY18-20. The revenue/EPS is likely to grow at a CAGR of 12%/18% over FY18-20.

Bajaj Corp Ltd: Outperform| Target Rs637| Return 25%

Macquarie initiates an outperform rating on Bajaj Corp with a target price of Rs637. The brokerage firm of the view that Bajaj Corp is a major play on a rural recovery in India.

Bajaj Corp can potentially have a portfolio of hair-oil brands. Bajaj Almond Drops remains a cash cow, but the company to reduce dependence. It expects a significant ramp-up in NoMarks over FY18-20.

Rural recovery is likely to help boost volume. Bajaj Corp re-rating imminent on earnings pick-up & diversification, said the note.

Magma Fincorp Ltd: BUY| Target Rs220| Return 22%

IIFL initiates a buy recommendation on Magma Fincorp with a target price of Rs220. The business performance is at an inflection, said the note.

A larger part of business restructuring is already complete and disbursements growth is gradually improving. Improving financial performance should lead to a credit rating upgrade going forward.

The financial performance will improve with AUM growth. Higher loan growth, margins would aid revenue growth, said the note. IIFL expects disbursements, AUM, and net profit to grow at a compounded rate of 26 percent, 17 percent and 28 percent respectively over the financial years through March 2021.

The valuation is highly attractive and presents a good opportunity for entry at this point. Sanguine earnings outlook, attractive valuations strengthen investment case.

Jubilant FoodWorks Ltd: BUY| Target Rs 2300| Target 20%

BofAML maintains a buy call on Jubilant FoodWorks but raised its 12-months target price to Rs2300 from Rs2000 earlier.

The strong same-store sales growth (SSSG) profitability could drive consensus upgrade. The global investment bank expects 10 percent SSSG in the previous quarter, led by the favorable base, industry changes.

Strong earnings per share’s compounded growth rate is likely to back premium valuation. It expects earnings per share to grow at a compounded rate of 59 percent over the financial years through March 2020.

JSPL: BUY| Target Rs 375| Return 42%

Citigroup maintains buy on JSPL and raised its price target to Rs 375 from Rs 219 earlier. The operational capacity has potential to generate higher operating income.

The volume ramp-up has started to show now.But, the stock is still undervalued and the best is yet to come. It expects to break even at net profit level from the next financial year onwards.

Emami Ltd: BUY| Target Rs 1655| Return 28%

Motilal Oswal maintains a buy on Emami and raised its target price to Rs1655 from Rs1564 earlier. It is a prime play on rural demand growth and wholesale recovery.

The pace of innovation is among the best of the breed. The R&D and advertising spend are the highest among peers. The domestic brokerage firm is of the view that the international business poised to turn around. Recovery in Kesh King business is the key going forward.

It expects earnings to grow at a compounded rate of 20 percent over the financial years through March 2021. The stock remains a credible long-term play as valuations are still attractive.

MORE WILL UPDATE SOON!!

Top 10 stocks to buy this week which could give up to 40% return in short term

The trend seems to be on the upside and the ideal strategy is to buy on dips just like we saw on Friday when market witnessed mild profit booking decline which was quickly bought into.

  

The Nifty50 index rose to fresh record highs last week and came closer to its next crucial resistance level of 10,700. The index closed with gains of 1.1 percent for the week ending January 12, however, the coming week is likely to be volatile.

The trend seems to be on the upside and the ideal strategy is to buy on dips just like we saw on Friday when market witnessed mild profit booking decline which was quickly bought into.

But, some of the indicators are giving indications of Nifty being in an overbought zone and profit booking decline is possible ahead of the budget. Investors should maintain their long positions as long as 10,550 remains intact.

We had highlighted that the index is not finding similar sort of strength if manages to breakout in the upward direction. Also, the possibility of volatility increasing was on the cards. All these factors were seen during the session and due to smart recovery, the Nifty eventually ended the week on a high note.

The way index smartly recovered is generally considered as a good sign; but, due to wild swings, we can now see a copybook formation of ‘Dragonfly Doji’ on the daily chart. The said pattern at higher levels does not bode well and hence, one needs to be closely tracking how markets behave in the first half of the week,” he said.

Chavan further added that markets are reluctant to fall; we would rather wait for a confirmation to happen. The pattern will get activated below its low i.e. 10597 and hence, any sustainable move below this key support would extend further weakness in days to come.

We have collated a list of ten stocks which could give up to 40% return in the short term:

Brokerage: SMC Capital 

Cholamandalam Investment and Finance Company Ltd: BUY | Target Rs 1440| Stop Loss Rs 1230| 1-2 months| Return 10%

The stock closed at Rs 1310.80 on 12th January 2018. It made a 52-week low at Rs 912 on the 10th March 2017 and a 52-week high of Rs 1353.80 on 8th January 2018. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs 1167.13.

The short-term, medium term and long term bias look positive for the stock. The stock had witnessed a decent upside from Rs 1150 to Rs 1300 levels in a week and had consolidated in Rs 1250-1320 levels for eight weeks.

The stock now has formed a “Bull Flag” pattern on weekly charts, which is bullish in nature. Last week, the stock has given the pattern breakout with good volume, so buying momentum can continue for coming days.

Therefore, one can buy in the range of Rs1280-1290 levels for the upside target of Rs1410-1440 levels with a stop loss below Rs1,230.

Dewan Housing Finance Corporation Limited (DHFL): BUY | Target Rs 680| Stop Loss Rs 570| Time 1-2 months| Return 11%

The stock closed at 614.15 on 12th January 2018. It made a 52-week low at 264.10 on 13th January 2017 and a 52-week high of 679 on 03rd November 2017.

The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at 511.64. After registering an all-time high, stock consolidated in the range of Rs570-620 levels for five weeks and was forming a “Continuation Triangle” on the weekly charts, which is a bullish pattern.

Last week, the stock has given the breakout of pattern and also has managed to close above the same. On the indicators front, RSI and MACD are also showing strength at current levels.

Therefore, one can buy in the range of Rs600-608 levels for the upside target of Rs670-680 levels with a stop loss below Rs570.

Analyst: Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking Pvt Ltd

Container Corporation : BUY | Target Rs 1524| Stop Loss Rs 1390| Time 5-10 sessions| Return 6%

Finally, after a long consolidation of nearly three months, the stock prices managed to surpass the ‘Horizontal Line’ resistance at Rs 1400 along with sizable volumes.

This was followed by some modest profit booking for a couple of days. However, the way stock prices rebounded precisely after retesting the Rs 1400 mark on Friday, we expect the stock to resume its upward trajectory in days to come.

Thus, we recommend buying this stock for a target of Rs 1524 over the next 5 – 10 sessions. The stop loss should be fixed at Rs 1390

Indo Count Industries: BUY | Target Rs 144| Stop Loss Rs 129.50| Time 9%

Last week, the stock prices broke out from its recent congestion zone around 130, indicating short-term reversal for the stock. This price action was accompanied by a significant rise in volumes, which is a sign of strong buying interest.

Although the stock came off a bit in last two days, we expect the stock to extend this rally by looking at the ‘RSI-Smoothened’ continuing its upward trajectory well above the 70 mark.

The momentum traders can look to place their bets for a short-term target of Rs 144. The stop loss should be fixed at Rs 129.50.

Voltas: SELL| Target Rs 612| Stop Loss Rs 644| Time 5-10 sessions| Return 3%

This stock has been enjoying its stellar run since last twelve months and has clocked new record highs. Undoubtedly, the longer term outlook remains strongly bullish as the overall structure looks quite sturdy.

But, with a near-term view; there are some early signs of exhaustion. Since the last couple of weeks, we have been recommending going short at higher levels.

The stock remained under pressure and has broken down from its important near-term support of 640. Thus, we continue to recommend selling for a short-term target of Rs 612. The stop loss now should be fixed at Rs 644.

Analyst: Sumeet Bagadia Associate Director Choice Broking

Glenmark Pharmaceuticals: BUY| Target Rs 750| Stop Loss Rs 580| Return 20%

On a daily chart, the stock has given a breakout of its neckline of inverse Head & Shoulder pattern which can be considered as bullish reversal formation and indicates upside movement in the counter.

Moreover, the stock has given a breakout of its upper band of falling wedge formation with above-average volume which indicates a robust upside movement in the counter.

Furthermore, the stock has started to trade above its 100-days moving average (DMA) which is placed at a Rs592.10 level which shows that the trend has changed to up from down.

Apart from this, the stock has formed a positive crossover of 21 and 50 weeks moving average which can be considered as bullish crossover which shows positive momentum in the stock.

Analyst: Jay Purohit - Technical & Derivatives Analyst, Centrum Broking Limited

RCF: BUY| Target Rs 150| Stop Loss Rs 85| Time 3-4 months| Return 42%

The stock is moving in a sideways direction and is making 'Lower Highs Higher Lows' on the monthly chart. The consolidation phase of last ten years has resulted in the formation of a 'Symmetrical Triangle' pattern on the monthly time frame.

Currently, we are witnessing a breakout from the mentioned pattern with decent volume (see exhibit), which is a positive sign for the stock.

Momentum oscillator such as ‘RSI’ and ‘MACD’ too are supporting the bullish argument on the counter. Thus, traders are advised to buy the stock at the current juncture and on declines to Rs103 for a target price of Rs142 - 150 in the coming 3-4 months. The stop-loss for the trade set-up should be placed at Rs85 on a closing basis.

Bata India: BUY | Target Rs 960| Stop Loss Rs 685| Time few weeks| Return 29%

After a decent rally from Rs507.60 to Rs832.80, the stock has started moving in a corrective phase from the last couple of months.

The fall got arrested around the 38.20 percent retracement level of the above-mentioned rally and the stock has started rebounding piercingly.

We witnessed a formation of a couple of ‘Doji’ candles on weekly chart around the support levels, which was followed by a positive momentum. The ‘RSI’ oscillator is showing ‘Positive Reversal’ on the weekly chart and thus showing strength in the counter.

Thus, traders are advised to buy the stock at current juncture and on declines to Rs735 for a target price of Rs920 – 960 in the coming weeks. The stop-loss for the trade set-up should be placed at Rs685 on a closing basis.

Titagarh Wagon Ltd: BUY| Target Rs 225| Stop Loss Rs 157| Time 3-4 months| Return 29%

After a decent rally from Rs 105.55 to Rs 189.70, the stock has seen some correction in the recent past. However, the stock again started rebounding after taking the support of the 38.20 percent retracement level of the mentioned rally.

On the monthly chart, we witnessed a ‘Trendline’ breakout in November 2017 and the prices managed to sustain above the same.

Considering the positive placement of ‘RSI’ and ‘MACD’ oscillator we are expecting a resumption in the uptrend. Hence, short-term investors can buy the stock at current juncture for a target of Rs205 – 225 in the coming quarter. The stop-loss should be kept at Rs157 on a closing basis.

Rallis India Ltd: BUY| Target Rs 325| Stop Loss Rs 252| Time Few Weeks| Return 23%

The stock is moving in a sideways direction from last few months; wherein we can see a ‘Higher High Higher Low’ sequence on the weekly chart. We witnessed a breakout from the ‘Continuous Inverted Head & Shoulder’ pattern on the weekly time frame.

The volumes have also increased drastically in the ongoing up move, indicates buying interest from stronger hands.

Since momentum oscillators are also placed positively along with a set of moving averages, we are expecting Rs310 –Rs325 levels in coming few weeks. Thus, traders are advised to buy the stock in the zone of Rs260 – 270 with a stop-loss of Rs252 on a closing basis.

MORE WILL UPDATE SOON!!

Record highs likely to continue for Nifty; 4 stocks which could give up to 16% return

The upcoming session is expected to be on the range-bound level at 10750 on upside and 10480 on the downside and any slip below this level should be buying opportunity.

  

The Nifty index witnessed a staggering leap during the past session to register a record high level after breaching its crucial psychological level at 10,650. It closed the session at 10681 levels on Friday with the weekly upside of 1.16 percent.

After an initial gap-up opening on the last trading session, the index witnessed a marginal consolidation but managed to pull back to hit fresh record highs with strong vindication for bulls regime.

Despite slipping marginally on Wednesday to form a “Hanging Man” kind of a pattern, the index rebounded on Thursday to form a small bullish candlestick pattern which was aided on last closing session to form a strong bullish candlestick pattern on its weekly price chart.

Thus with positive cues on trend channel, it is likely to keep the uptrend momentum. Further secondary momentum indicators remain on a positive trajectory with RSI level at 69.8 coupled with strong support from MACD.

Based on Fibonacci Retracement, currently, the index is trading above all the level with major support at 10493 level and immediate resistance level at 10690.

With volatility regime ahead of earnings season and budgetary outline, it will be advisable to trade with caution with strict stop-loss.

The upcoming session is expected to be on the range-bound level at 10750 on upside and 10480 on the downside and any slip below this level should be buying opportunity.

Here is a list of top 4 stocks which could give up to 16% return in the short term:

Den Network Ltd: BUY | Target Rs 155 | Stop-loss Rs 121 |Return 16%

Den Network witnessed a fresh upside breakout in last week’s trading session to trigger a 52-weeks high at Rs133 level after a flat initial movement.

It further witnessed a strong volume breakout comparing to its five-day average volume which aided the uptrend channel. On the weekly price chart, the stock formed a strong bullish candlestick pattern which is expected to keep bullish instance intact.

Further, the secondary momentum indicator suggested a swift rally for the scrip with positive cues from RSI level at 59.4 coupled with bullish crossover to happen anytime soon.

Currently, the price started to trade above its crucial 20-days EMA level (109) which signed a positive signal for the scrips.

The scrip is witnessing a major support level at 108 and resistance level upper band at 160. We have a BUY recommendation for Den Network which is currently trading at Rs. 133.55

Tourism Finance Corporation of India: BUY| Target Rs 192 | Stop-loss Rs 162 |Return 9%

Tourism Finance continued to hold the uptrend trajectory despite witnessing a marginal consolidation in the month of October and rebounded back from 135 level towards current level.

It saw a substantial increase in volume during the last week’s trading session which vindicated the rally to touch new 52-weeks high level at 182.

On the daily price chart, the scrip continued to form a bullish candlestick pattern coupled with engulfing pattern on the weekly chart, thus suggesting a possibility of the fresh uptrend.

The RSI at 65 indicates a favourable buying price zone coupled with a positive trend in MACD at 2.81 above its Signal Line. Further, the breakout from upper band has signalled a positive outlook with major support at 157 and immediate resistance at 182 followed by 203 level

We have a BUY recommendation for Tourism Finance which is currently trading at Rs. 176.15

Sunteck Realty Ltd: SELL| Target Rs. 385 | Stop-loss Rs 414 | Return 5%

Sunteck Realty faced denting headwinds on its weekly price chart after registering a high of 435 and continued to trade on a negative trajectory. Further, the volume support turned grey on the backdrop of profit booking at a higher level, keeping the scrip under pressure.

On the weekly price chart, it formed a strong bearish candlestick pattern which signalled a negative outlook for the scrip in an upcoming session without any major upside breakout.

Further, the price is currently below crucial moving average level coupled with bearish crossover on its momentum indicator. The stock is facing resistance from its 20-days EMA at 414 levels while the support level is seen at 379.

We have a SELL recommendation for Sunteck Realty which is currently trading at Rs. 404.70

Rain Industries Ltd: BUY| Target Rs. 467 | Stop-loss Rs. 430 | Return 4%

Rain Industries made a fresh upper band at 475 levels during last week’s trade and breached its crucial resistance level although it failed to sustain to close marginally below its opening level.

A healthy consolidation from this level indicated a genuine attempt to breakout at upper trend channel in short term.

The scrip continued to form a strong bullish candlestick pattern on its long-term price chart. The momentum indicator with RSI level at 70 further suggests a strong support for bullish uptrend coupled with MACD indicating a bullish crossover just happening at current regime.

Currently, the scrip is facing an immediate resistance from its 52-weeks high at 475 levels and major support will be seen at 407 levels. We have a BUY recommendation for Rain Industries which is currently trading at Rs. 447.95

MORE WILL UPDATE SOON!!

D-Street witnessing Pre-budget rally; More than 20 stocks rose 20-50% in 2 week

The rally is not over and investors should maintain their long positions on the Nifty as the rally is likely to stretch towards 11000 ahead of the Budget

 

Surprised, why markets seem to be climbing all wall of worries and manage to hit record highs. Well, analysts tracking D-Street say that we are in the midst of a pre-budget rally which could stretch towards 10,900 by Budget Day.

The Budget session will start from January 29 and the final Budget will be president by the finance minister on February 1, Thursday.

After closing on a strong note, Nifty continued its winning run in the first month of the year 2018 where as many as 23 stocks in the S&P BSE 500 index rose 20-49 percent in just two weeks or roughly 10 trading sessions.

Stocks which rallied up to 49 percent include names like Phillips Carbon Black which rose 49 percent, followed by EIH which gained 32 percent, and Aban Offshore rallied 29 percent in the last two weeks.

Bulls dominated the S&P BSE 500 index as only one-third of stocks in the index gave negative returns while the rest closed in green as of data collected on 12 January (2 weeks). Plenty of action was seen in the small and midcap stocks which saw huge buying interest from domestic investors.

The total money garnered by fund houses through SIPs increased to over Rs 59,000 crore in 2017 as compared to about Rs 40,000 crore in 2016, Association of Mutual Funds in India (Amfi) data showed.

The rally is not over and investors should maintain their long positions on the Nifty as the rally is likely to stretch towards 11000 ahead of the Budget, suggest experts.

Yes, we are living the pre-budget rally. The Nifty was in a pattern of a wedge and the current up-move is the final leg of it. The Nifty is not over-heated yet and there still exists room for 11,000-11,200 before we witness a halt.

Smart money knew this and that’s what the Open Interest data has been suggesting for a long time. Option writers were placed at and above 11000 to keep enough safety pre-event.

Most of the negatives are quickly bought into by the bulls which suggest that this bulls market has legs to move further into uncharted territory. On Friday, the Nifty did succumb under profit booking pressure after a press conference was carried out by the Judges of the Supreme Court.

Investors have nothing to fear about the structural Bull Run seen on D-Street; however, if the political crisis out further there could be some knee-jerk reaction.

Despite the challenges at micro as well as macro levels, bulls have continued their momentum. Budget is expected to be rural heavy and populist and we can see the market is already aligning towards such theme.

Given that, this is going to be the last budget of present Government, a lot of hopes are gathering pre-budget and that is being reflected in the stock prices. Hopefully, the market should settle at these levels between 10600 and 10900 pre-budget.

Global Rally driving gains on D-Street:

The secular trend that we are witnessing is very Global in nature. Most of the Major Indices are trading at all-time high driven by High Liquidity. Currently, Budget is what is driving the trajectory of the market upwards.

We are expecting a good and populist budget considering politically that we have Eight States to go for Election and then the Lok Sabha Election in FY-19. This pre-Budget Rally is well augmented by Global Liquidity.

“We can see the pre-budget meetings going on with all industries and Panels formed by the government. The sentiments on Indian markets are very positive. Technical studies suggest we are targeting 11500 levels. Minor corrections are still an opportunity to Buy,” he said.

Commenting on the Budget, Nadeem expects that LTCG might be taken care by Government since benefits of Zero rate are far more than that of Taxing investors. Additionally, FM could consider, an increase in Disinvestments targets to offset any major Tax cut in the coming budget.

MORE WILL UPDATE SOON!!