[Premium] NIFTY NEXT 50 Stocks To Buy

JC Parets
April 5, 2018

Stocks in India are going up, on both an absolute and relative basis. Let's not forget that. So it's our job to isolate the ones with the most favorable risk vs reward scenarios. The idea is to risk the least amount in the case that we're wrong, but be able to profit the most when we're right. This week I put together a list of the stocks with attractive setups in the NIFTY50 Index. Today we're focusing on the NIFTY Next 50, which are the remaining stocks in the NIFTY100.

 

Here is Motherson Sumi Systems stuck below this 340 level that has been important since last August. If we are above 340 in $MOTHERSUMI, the risk here is higher and we want to be long with a target towards 465:

Pidilite Industrie is another one showing both relative strength and positive momentum characteristics. The trade has been to be long $PIDILITIND if we're above 394 with a target above 1094. That is still the case:

It looks like this base in Britannia Inds is complete. We want to be long $BRITANNIA if we're above 4900 with a target near 6200:

Procter & Gamble continues to push up against new highs. The fact that it was able to hold above 8850 was huge here. We want to be long $PGHH if we're above 9400 with a target above 11,100:

Here is a good example of a 2-year consolidation resolving higher. This is a massive breakout, in my opinion. If we're above 1400, we want to be long $INDIGO with a target above 1820:

Look at Titan Company. This is a great example of why these Fibonacci extensions are important to recognize (I explain my entire fibonacci analysis process here, I encourage you to give it a quick read). There are a few things I'd like to point out here. First, look at the base from 2014 through early 2017. "The bigger the base, the higher in space", is how I learned it. The gap through 700 was evidence this was a strong stock with room to run. As it turns out, just enough room to run to reach the next extension and stop. The first push up to 945 was in January and the last week or so we've see another retest and failure. I think there is enough evidence here suggesting this is a strong stock showing both relative strength and positive momentum. So the trade is simple. We only want to be long $TITAN if we're above 950 with a target above 1345:

I think there are a lot more positives out there than negatives. I'd rather be buying strong stocks showing positive momentum than selling weak stocks, or even buying weak stocks and sectors. 'Buy high and sell higher' is the mentality right now for us. In other cycles of the market a different strategy will be more appropriate. But we'll just worry about that then. For now, this is a good list to start with when you're looking for stocks to own with favorable risk vs rewards.

Cheers,

JC

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