The Indian stock market has kicked off October with a downturn, following a significant rally in September. The benchmark indices, including the Sensex and Nifty 50, have witnessed a decline of close to 3% thus far in October. This drop can be attributed to continuous and substantial outflows from foreign institutional investors (FIIs), with Foreign Portfolio Investors (FPIs) selling Indian equities worth approximately ₹50,300 crore over just six trading sessions this month.
Particularly concerning is the Nifty 50 index, which has fallen 4.7% from its record high of 26,277.35 achieved on September 27. In this atmosphere of heightened market volatility, the brokerage firm Anand Rathi has identified two promising stocks as Emerging Picks for October that investors should consider.
Anand Rathi believes that these two selected stocks are positioned well for noticeable gains in the short-to-medium term, recommending them for investments with a timeframe of 30 to 90 days.
The highlighted stocks for October are Tatva Chintan Pharma Chem and Tata Elxsi, both of which have shown potential for recovery or upward movement amid current market conditions.
Tatva Chintan Pharma Chem | Buy | Target: ₹1,105 – 1,140 | Stop Loss: ₹930
Tatva Chintan Pharma Chem is currently navigating a strong downtrend, characteristic of many chemical sector stocks. Despite this, the stock has recently registered lower lows; however, the weekly Relative Strength Index (RSI) did not follow suit, indicating a strong positive divergence. This technical phenomenon suggests there may soon be a reversal or bounce in its price, making it an attractive buy according to Anand Rathi.
Traders should look to purchase Tatva Chintan Pharma Chem within the price range of ₹1,010 – ₹990, with a stop-loss order set at ₹930. The target prices are set between ₹1,105 and ₹1,140, capitalizing on the anticipated upward movement.
Tata Elxsi | Buy | Target: ₹8,410 – 8,700 | Stop Loss: ₹6,960
Tata Elxsi, a notable stock within the Tata Group, has seen a significant rally over recent months. The shares surged from approximately ₹6,900 to the point near ₹9,000. It appears that Tata Elxsi has now retested key breakout levels, coinciding with the 200-day Exponential Moving Average (DEMA). Furthermore, the stock is experiencing a ‘golden crossover,’ where the 50-day DEMA intersects above the 200-day DEMA, a bullish signal for potential price appreciation.
For those looking to invest, it is advised to enter long positions in Tata Elxsi shares around the ₹7,540 level, with a stop-loss placed at ₹6,960. This strategy is recommended with a short-to-medium investment horizon of 30 to 90 days, as the stock shows promising signs of recovery.
Disclaimer: The investment recommendations specified above represent the opinions of individual analysts or brokerage companies and do not reflect the views of this publication. Investors are encouraged to seek advice from certified financial experts before making any investment decisions.
