Chartist Talks: Surely these 2 stocks likely to outperform benchmark index in March, says Rahul Ghose of Hedged

"One can surely expect HDFC Bank and Hindalco Industries to outperform Nifty & trade with a positive bias in the upcoming month," said Rahul Ghose, the CEO of Hedged in an interview with Moneycontrol.

According to him, the minimum price targets on Hindalco look to be in the range of Rs 700-730 in the short-term, while HDFC Bank looks set for Rs 1,800-1,820 levels.

Rahul with nearly two decades of financial market experience believes 2025 as a whole will be a lacklustre year for markets with more sideways movements than sharp trending movements on the upside.

Is it time to consider AU Small Finance Bank considering weekly charts?

The stock has fallen from Rs 820 to 500 levels, which is almost a 60% correction. Considering that it is bouncing from oversold territories after such a steep fall, a short-term bounce is not ruled out. However, a medium to longer-term recovery looks unlikely. The lower tops-lower bottoms formation on daily, weekly & monthly timeframe charts suggest the stock is likely to meet with selling pressure around Rs 610-620 levels. For the stock to get into a sustained uptrend it has to first break the lower tops lower bottoms formation, create a base, and then breakout. If one wants to play for a short-term bounce as a trader, it looks fine, however, a sustained longer-term upmove does not look on the card.

Do you see significant movement in IndiGo?

Yes, amongst the broader markets, IndiGo looks positive. One of the few charts that is in a monthly positive trend, above the 20 EMA & a weekly sideways trend. On a weekly time frame, IndiGo currently is trading inside a symmetrical triangle formation. This formation indicates a tug of war between buyers & sellers & generally the triangle breakout in the direction of the preceding trend.

In the case of IndiGo, the preceding trend on the weekly time frame is firmly up, so one would not be surprised if the symmetrical triangle breaks out to the upside & goes on to create a new high. The short-term resistance for the stock is close to Rs 4,700 levels above which the stock should gain some momentum towards the upside to Rs 5,000 levels.

Why is Hindalco outperforming?

Technically, Hindalco is amongst the strongest-performing stocks in the metal sector. The stock has taken strong support on monthly 20 EMA with a bullish Morning Star pattern as of February 28. This price action is positive for Hindalco and indicates that in the upcoming weeks, the stock is likely to touch Rs 700 odd levels. There is no quality level of resistance in between. The strong quarterly results have helped build momentum in the stock & institutional brokerage firm CLSA revising the target upwards towards Rs 815 levels has acted as an additional trigger.

What are your top 2 picks for March?

HDFC Bank & Hindalco.

Both stocks have been relative outperformers in the recent decline. Additionally, both stocks have taken support around the monthly 20 EMA with bullish candle confirmations. While Hindalco closed with a Morning Star on a monthly chart, HDFC Bank closed with a Bullish Marubozu candle on the daily time frame chart & a Bull Harami on the monthly time frame charts.

The minimum price targets on Hindalco on charts look to be in the range of Rs 700-730 in the short-term and HDFC Bank looks set for Rs 1,800-1,820 levels. The broader weakness in the indices will make it difficult for these stocks to have a strong & sustained rally, however one can surely expect these stocks to outperform Nifty & trade with a positive bias in the upcoming month.

Do you foresee the possibility of a rebound in Nifty in March or will there be rangebound action for the month before the beginning of the next leg of the rally?

Nifty at 22,100 right now is very close to its bottom, some knee jerks could be there, but by the end of March, I expect Nifty to scale back up above 22,000 levels. 2025 as a whole will be a lacklustre year for markets with more sideways movements than sharp trending movements on the upside. The cap for Nifty for 2025 is at 27,200 for me, which is only 1,000 points higher than the previous high.

What is your advise and strategy in the current correction?

Even at this price, it is good to start to accumulate names like Larsen & Toubro, Reliance Industries, Tata Motors, and some FMCG names like Asian Paints to name a few. These prices are attractive from a valuation point of view and one should stick their neck out and buy 1/3rd of their gauged quantity at the current price of Nifty 22,000.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Disclaimer: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.