On analysts' radar: Trading bets that could shine in the New Year

As the stock market continues its record-breaking spree, the search is on for trading ideas that will beat the benchmark indices. The new year has brought in many such opportunities, particularly in the midcap space where stocks are starting to see a pick-up after a long period of under-performance. Among sectors, metals is being viewed as a good trading bet with the possibility of a resolution to the US-China trade war. Here’s a look at eight such trading bets by technical analysts for the first quarter of 2020.SUDARSHAN CHEMICAL INDSCMP: Rs 413.35Last 1-Year Change: 19.9%Target by March 31: Rs 470Sudarshan’s shares are likely to gain nearly 14% in the next three months, according to IIFL, given the brokerage’s target of Rs 470 by March 31. The brokerage has a positive view on the stock on a fundamental basis. Having steadily gained market share and become the world’s 4th-largest colour pigment producer, Sudarshan is well-placed to continue its rapid growth in the context of the imminent exit of its two largest global competitors BASF and Clariant, said IIFL.EXIDE INDUSTRIESCMP: Rs 189.05Last 1-Year Change: -27.6%Target by March 31: Rs 208IIFL sees the stock touching Rs 208 by the end of the quarter, which implies an upside of 10% from current levels. Fundamentally, the brokerage is positive on the stock as it stands to benefit from auto replacement demand recovery, technology upgradation and launches, emerging opportunities in solar and e-rickshaws space, cost control as well as technology upgradation measures. The brokerage expects a 17% compounded growth in earnings per share over FY19-FY22 period.LARSEN & TOUBROCMP: Rs 1,345Last 1-Year Change: -5.7%Target by March 31: Rs 1,420L&T is well placed to navigate the weak investment environment, backed by a healthy balance sheet and strong technical execution capabilities, as per IIFL’s view. There could be a near-term overhang due to uncertainty regarding the high speed rail ordering post the change of government in Maharashtra, which could impact order inflows in FY21. However, technical charts suggest the stock is headed higher in the next 3 months & IIFL expects it stock to rise to Rs 1,420 in this quarter.GRASIM INDUSTRIESCMP: Rs 766.60Last 1-Year Change: -6.06%Target by March 31: Rs 920Swapneel Mantri, technical analyst at Sushil Finance, views Grasim Industries as one of his top ideas for the quarter and expects the stock to touch Rs 920 in the next three months. “The scrip has been in an intermediate downtrend since the highs of 820 levels. The scrip has been in consolidation near the 720-740 zone and is showing signs of bottoming out,” said Mantri. He recommends buying the stock at the current level with a stop loss of Rs 735 on weekly closing basis.HINDALCO INDUSTRIESCMP: Rs 220.20Last 1-Year Change: 2.7%Target by March 31: Rs 260-280Sushil Finance expects the stock to touch Rs 260 in the next three months. This means a potential gain of 18% by the March quarterend. “It has been in a downtrend since Rs 270 levels and now it has crossed its 200-DMA (day moving average) level of Rs 198 recently. It is showing signs of bottoming out,” said Swapneel Mantri of Sushil Finance. Chandan Taparia of Hindalco, said the stock has formed a bullish harmonic pattern on the monthly chart. “Looking at the technical evidences, we are advising to buy the stock for an upmove towards 260-280 with a stop-loss of 200 levels,” he said.TATA STEELCMP: Rs 484.95Last 1-Year Change: -1.8%Target by March 31: Rs 560“The stock has been consolidating in the range of Rs 390-Rs 400 levels for a long time. Post Brexit clarity, it has given a breakout and we expect the upward trend to continue,” said Swapneel Mantri of Sushil Finance. Mantri expects the stock to rise to Rs 550-Rs 560 by the end of the quarter. 73055837 TATA MOTORSCMP: Rs 193.85Last 1-Year Change: 15%Target by March 31: Rs 225The Nifty Auto index has given a trendline breakout on the daily chart and is sustaining well above the same, said Chandan Taparia of Motilal Oswal. “Tata Motors rallied sharply in the last three months with healthy volumes, which is a positive sign for the stock. Looking at the current price structure, we won’t be surprised to see an upmove towards Rs 215-225 levels soon. Thus, any decline towards Rs 185 shall be used as a buying opportunity with a stop-loss of Rs 174 levels,” said Taparia.JUBILANT FOODWORKSCMP: Rs 1687.75Last 1-Year Change: 36.2%Target by March 31: Rs 1,830The stock is forming higher top-higher bottom formation over the last four months, said Taparia of Motilal Oswal. “The stock is sustaining above its consolidation phase of the last 9 weeks. RSI oscillator is sustaining above 60 levels on daily and weekly charts and it is showing strength in the counter. Looking at the chart structure, we are expecting an upmove towards Rs 1,830 levels,” said Taparia. He recommends buying the stock with a stop loss below the Rs 1,605 level.

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