Jigar S Patel of Anand Rathi recommends buying these stocks on October 28

GRASIM

  In the past two months, Grasim has consistently encountered resistance around the 2,800 level, indicating that it struggles to break past this mark. Additionally, the daily Relative Strength Index (RSI) has been unable to surpass the 60 level, signaling weak upward momentum, which raises concerns for bullish investors. Recently, Grasim also broke below a bullish trendline, a bearish signal, and closed below its 20-day Simple Moving Average (SMA) high-low band. These technical indicators collectively suggest a potential downside. Therefore, we recommend a short position in Grasim within the 2,620-2,650 range, with a target of 2,475 and a stop-loss above 2,700 on a daily closing basis.

 

 

  HDFCLIFE

  Over the past two months, HDFCLIFE has repeatedly faced resistance near the 745 level, which corresponds to a significant historical peak last seen in September 2021. This resistance level has proven challenging for the stock, indicating limited buying momentum above this mark. Further reinforcing this weak upward drive, the daily Relative Strength Index (RSI) has consistently failed to exceed the 60 level, a threshold that typically signals strength in bullish trends. This inability to reach higher RSI levels suggests a lack of strong buying interest, causing concern for bullish investors. Recently, the stock has broken below an established bullish trendline, signaling a potential trend reversal to the downside. Adding to the bearish outlook, HDFCLIFE has closed below its 20-day Simple Moving Average (SMA) high-low band, indicating weakening support and momentum. Based on these technical factors, we recommend a short position in HDFCLIFE within the 710-720 range, with a target price of 650. To manage risk, a stop-loss is advised above the 748 level on a daily closing basis.

 

BRITANNIA

  Britannia's stock has seen a substantial decline, dropping by around 13.5 per cent in the past month. However, it appears to have found strong support at the 5,600 level, a region that previously acted as a demand zone where buying interest emerged. Observing the hourly chart, a bullish divergence is visible on RSI hourly scale—indicating a possible reversal—as recent red candles have decreased in size while green candles are becoming larger. This pattern suggests that selling momentum is weakening, and buyers may be gradually stepping in. 

Given these signals, we recommend a long position in Britannia within the 5,650-5,700 range, with an expected upside target of 5,950. To manage downside risk, a stop-loss is suggested near 5,535, set on a daily closing basis, ensuring an exit if the support fails and the stock declines further. This technical setup suggests a potential recovery, provided the demand zone holds strong.

 

(Jigar S Patel is a senior manager of equity reserach at Anand Rathi. Views expressed are his own.)