[Premium] Here Are The Stocks We're Buying

JC Parets
March 4, 2020

Today we wrote a post updating our market view, which is that we expect further chop but are looking to put cash to work slowly on the long side. In that post we outlined what we'd need to see to get aggressively long, so please check it out.

This post is going to outline several stocks that are presenting attractive reward/risk scenarios at current levels, so if you need long exposure this is where we want to be.

First is Alkem Labs, which met our price target near 2,725 and is now flagging tightly. If prices break out above that level, it would signal the continuation of the stock's newly formed uptrend and target 3,375.

Click on chart to enlarge view.

Divi's Labs is an absolute monster. Any weakness in this stock towards 1,900 should be bought as our longer-term target remains 2,755.

Balkrishna Industries Ltd. is the one standout in Autos. This pullback towards 1,000 offers an attractive reward/risk for a move up towards 1,425.

Coromandel International is flagging tightly above former resistance at 580. As long as prices are above that level then we can be long with a 733 target.

Pidilite Industries is pulling back towards our risk management level of 1,420. Any weakness towards there should be viewed as a buying opportunity as our longer-term target remains 1,950.

Sellers in PI Industries tried to close the stock below our 1,530 risk management level twice and failed, so we're watching to see if it can follow-through to the upside this week. As long as prices are above 1,530, the bias is higher towards 2,045.

Titan Company Ltd. probably needs more time to work through the overhead supply at 1,330, but I wanted to highlight this action because it's extremely constructive. We do anticipate a breakout above 1,330 soon but would be waiting for a move above that level for confirmation before getting involved. Upside targets are near 1,650 and 1,970.

Torrent Power is a standout in that it has managed to hold above former resistance at 300 despite multiple attempts to break below it. As long as prices are above that level then its breakout is intact and our target is 395.

We were fading Reliance Industries Ltd. up near 1,600 a couple of months back, but with prices back near support at 1,290 and momentum diverging positively, it looks to be worth a shot on the long side against tthat level. Our target is back up towards 1,600 where it peaked last year.

As we conclude I want to reiterate what was said in our market update post: Indian stocks are NOT in an uptrend, but are nearing the lower end of a 2-year range. As a result, we'd much rather be looking at long opportunities than shorts, but expect one last move to the downside in the major indexes before we form a tradeable low.

We think we’ll get there over the next month, but for now, we’re staying defensive by keeping position sizes small and being aware that whipsaws are more likely in this environment. Cash works too as we wait for more attractive reward/risk entries on the long side to develop.

If you need to be trading actively, these are the names we like on the long side. For now, there’s not enough evidence to suggest indiscriminately buying stocks as an asset class. We need to pick our spots carefully as we wait patiently for the market to deliver us a fat pitch.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team

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