Jigar S Patel of Anand Rathi recommends buying these three stocks on Oct 21

BEML

BEML Ltd. has recently formed a triple bottom pattern near its 200-day Exponential Moving Average (DEMA), indicating strong support at this level. This is coupled with a bullish divergence in the daily Relative Strength Index (RSI), a sign that the stock's downward momentum is weakening, making the setup more attractive for potential buyers.

In the latest trading session, BEML broke past its previous swing high of 3,900 and has managed to sustain above that level with ease, further strengthening the bullish outlook. As a result, we recommend entering a long position in the stock between 4,000 and 4,050, targeting an upside of 4,500. A stop-loss should be placed at 3,780 on a daily closing basis to limit downside risk.

 

MAZDOCK

Since reaching a peak of 5,843 on July 5, 2024, Mazdock has formed a series of lower highs and lower lows, leading to a significant 34 per cent correction in its price. Currently, the stock has found support at its 100-day Exponential Moving Average (DEMA) and has formed a double bottom pattern, which is a bullish reversal signal.

In the previous trading session, Mazdock also broke through a descending trendline, as shown in the chart, further enhancing its attractiveness from a technical perspective.

Additionally, the Relative Strength Index (RSI) has risen above the 50 level, which previously acted as resistance and now serves as support. Given these factors, we recommend buying Mazdock in the price range of 4,475 to 4,530, with an upside target of 4,950. A stop-loss should be placed at 4,275 on a daily closing basis to manage risk.

JKPAPER

Over the past month, JKPAPER has been trading within a consolidation range between 445 and 475, and it has recently broken out of this range, signalling potential for upward momentum. This consolidation phase took place between the 100-day and 200-day Exponential Moving Averages (DEMA), which is a favourable technical sign, suggesting that the stock has built a stable base for further gains.

Moreover, the Relative Strength Index (RSI), which had been moving within a range of 40 to 50, has also broken out and is now retesting the 52-53 levels. Based on these positive signals, it is advised to take a long position in JKPAPER within the 482 to 492 range, with an upside target of 535. To manage risk, a stop-loss should be set at 463 on a daily closing basis.

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