Raja Venkatraman recommends buying Leela Palaces Hotels & Resorts and The Great Eastern Shipping Co. for 1 October. The market indices Sensex and Nifty fell on Wednesday as investors sold metal and pharma shares. Despite this, these two stocks showed strong technical patterns that suggest potential growth for traders.
Stock market recap: Benchmark stock indices Sensex and Nifty closed lower for a third consecutive session on Wednesday, dragged down by fag-end selling in metal and pharma shares amid firm crude oil prices and elevated global bond yields.
The 30-share BSE Sensex closed 48.78 points, or 0.07%, lower at 72,480.29. The Nifty 50 fell 95.75 points, or 0.42%, to settle at 22,620.45.
Among the 30 Sensex constituents, Eternal, Sun Pharma, Titan, Adani Ports, Tata Steel and HDFC Bank were among the major laggards. Kotak Mahindra Bank, ICICI Bank, InterGlobe Aviation and Axis Bank were among the gainers.
Brent crude, the global oil benchmark, was up 0.54% at $103.10 a barrel.
Why it’s recommended: Leela Palaces Hotels & Resorts Limited is India's largest institutionally owned and managed pure-play luxury hospitality brand. Since June this year there has been a strong surge marked by profit booking that has seen the prices taking supports at the Tenkan Sen and Kijun Sen. The resumption post the support has been encouraging. A strong thrust always attract some buying interest. With the Average Directional Index after a pullback is seen crossing important thresholds, it can lead to some strong upward move in the coming weeks. Go long.
Key metrics:
P/E Ratio : 63.73,
52-week high: ₹588.35,
Volume: 1.25M
Technical analysis: Support at ₹510, resistance at ₹730.
Risk factors: Negative Cash Flows, Vulnerability to disruptions during asset upgrades and Aggressive cost-management pressures risking service quality moats.
Buy : above ₹575.
Stop loss: ₹547.
Target price: ₹640 (2 Months)
Why it’s recommended: The Great Eastern Shipping Co. Ltd (GE Shipping), is India's largest private sector shipping and oilfield services provider. Since March, every dip in this stock has seen some demand coming in pushing prices higher. Despite volatile market conditions and profit booking, the prices are able to form higher lows and the strong action with volumes seen this week highlights steady buying at despite the market situation. A rounding pattern from the value area region around 1250 zone holding good indicates that we can expect the upward drive to continue.
Key metrics:
P/E Ratio : 7.13,
52-week high: ₹1798,
Volume: 938.29K.
Technical analysis: Support at ₹1451, resistance at ₹1700.
Risk factors: Revenue cyclicality, Spot Market Exposure and seasoning of lending entities Elevated Ship Prices.
Buy : above ₹1,565
Stop loss: ₹1,493
Target price: ₹1,710 (2 Months)
Raja Venkatraman
Raja Venkatraman is the co-founder of NeoTrader, where he heads the training division. He conducts both offline and live market workshops, seminars, and webinars. He has been working under the guidance of Dr C K Narayan, his mentor and founder of Growth Avenues, for more than 20 years. He is an active trader in multiple asset classes, and actively shares his views on YouTube, blogs at NeoTrader, and on reputed news channels and websites. His Sebi-registered research analyst registration no. is INH000016223.