These are top picks by Jigar S Patel of Anand Rathi ahead of Budget 2024

Tata Steel 

Recently, Tata Steel experienced a significant decline, dropping nearly 22 points after forming a double top at the 180 level. This decline equates to a 12 per cent fall, reflecting considerable selling pressure. However, the stock found support around its 100-day Exponential Moving Average (DEMA), indicating a potential stabilisation point.

On the indicator front, the Daily Relative Strength Index (RSI) has formed an impulsive structure near the 30 oversold zone, which appears attractive at current levels. Therefore, we advise buying Tata Steel in the Rs 158-162 zone, with a target of Rs 175 and a stop-loss of Rs 153 on a daily close basis.

Chemplast Sanmar

Recently, Chemplast Sanmar has been in a corrective phase. However, in the previous trading session, it found support at its previous breakout upper band, accompanied by significant volume. Additionally, the Daily Relative Strength Index (RSI) has reversed from the 50 level on a daily scale, further affirming our bullish stance on the stock. Therefore, we recommend going long in the Rs 520-530 zone, with an upside target of Rs 600 and a stop-loss placed near Rs 488 on a daily close basis.

Hikal

During the past few weeks, Hikal has been in a corrective phase, experiencing a downward adjustment in its price. However, in the previous trading session, the stock found support at the upper band of its previous breakout level, a crucial technical indicator suggesting potential stabilisation.

This support was further validated by the formation of a bullish piercing candlestick pattern, a reliable signal of a possible trend reversal. Additionally, the Daily Relative Strength Index (RSI), a momentum oscillator, has reversed from the 50 level on a daily scale, indicating renewed buying interest and further affirming our bullish outlook on the stock.

Given these technical indicators, we recommend initiating a long position in the Rs 335-345 zone, with an upside target of Rs 390 and a stop-loss set at Rs 315 on a daily close basis to manage risk.

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