[Premium] Nifty 50 Stocks To Buy in May
First up is Indusind Bank which broke out of a seven month base in late March, retested the breakout area, and has headed higher since. We want to be buying weakness toward 1,805 and taking profits near 1,950 at which we'll reevaluate. Ultimately I think this move is just getting started and prices ultimately head to our second price target near 2,180 over the intermediate-term.
Kotak Mahindra Bank is has been on a tear since breaking out of its seven month long base in March. It's met our first price target at 1,195, so we want to be long above that level with a target up near 1,325.
Gail India Ltd. broke out of a seven year base last September and is now retesting the breakout area. We want to be buying this pullback as long as prices are above 300, with a target up near 400.
Reliance Industries Ltd. met out price target near 855 last September and has been consolidating above that level since. Prices are now breaking out of this range which suggests higher prices are ahead. We want to be long this name above 855, with a price target of 1,135.
Tata Consultancy Services broke out of three year base and broke out earlier this year. Since then our first price target has been met near 3,330, but we want to be buying pullbacks in this stock as long as prices are above that level and want to be taking profits near 4,120.
Mahindra and Mahindra looks similar to Tata Consultancy Service in that it consolidated for three years and broke out in early 2018. As long as prices are above 820 we want to be long and selling just below 1,000.
Asian Paints has been basing for the past year in a range between 1,100 and 1,225, but looks like it's ready to break out soon. Once prices get decisively above 1,230 we want to be buying the stock against that level and taking profits near 1,460.
Titan Company Ltd. has been in an extremely strong uptrend since breaking out of its range in early 2017, but recently met our price target near 935. As long as prices are above 930-935 we can be long and look to take profits near 1,130. One thing to note on this setup is the potential failed breakout and bearish momentum divergence that's occurring. If prices close below 930 and confirm a failed breakout a more neutral approach is best.
Larsen & Tourbo broke out of a two-and-a-half year base in December, retested the breakout area, and is now continuing higher. We want to be buying weakness in this name as long as we're above 1,260 and be taking profits near 1,620.
Zeel Entertainment Services is trying to break out above a one-and-a-half year base, but has not accelerated to the upside yet. There still seems to be some indecision at current levels, but if we can clear 600 on a closing basis we want to be buying the stock and trading it against the previous highs near 585. Our price target is up near 690 at the 161.8% Fibonacci extension of its range late 2016-2018 range.
The last name on the list is Adani Ports and Special Economic Zone Ltd. The stock broke out above its 2015 highs in July of last year and has been consolidating since as the 200-day moving average caught up to prices. In late March the stock fell below the breakout zone at 375, but quickly recovered. From failed move come fast moves and this situation is no different. As long as prices are above 375 we want to be long and taking profits near 500.
The Bottom Line: All of the stocks we looked at have the same characteristics; a rising 200-day moving average, momentum in a bullish range, and a favorable reward/risk. Risk management is our number one priority which is why we want to be involved in strong stocks with clearly defined exits in case we're wrong. The weight of the evidence continues to suggests higher prices are ahead, but we're remaining open-minded and will change our minds when the data tells us to. For now, these are some names from the Financial Services, Energy, IT, Automobile, Consumer Goods, Construction, Media & Entertainment, and Services sectors we want to be involved in.
Allstarcharts Team