Stocks to Buy: Trent and Bata India are among the top stock picks recommended by Kapil Shah, Technical Analyst at Emkay Global. Shah sees Trent extending its gains after a bullish breakout, while Bata India appears to be stabilising near a key long-term support zone, offering an attractive risk-reward opportunity for medium- to long-term investors.
Trent
Shah said, “Trent has displayed a strong technical turnaround after forming an Inverted Head & Shoulders pattern on the daily chart, signaling a potential reversal from the recent corrective phase. The stock has decisively broken above the neckline of the pattern, confirming the bullish breakout and indicating renewed buying interest. This breakout also coincides with the stock moving above a long-term falling trendline, adding further conviction to the positive setup.”
“On the higher time frame, the weekly chart highlights that the stock has found strong support near its 200-week EMA, a level that has historically acted as a reliable long-term demand zone. The ability to sustain above this support suggests that the broader primary uptrend remains intact despite the recent correction,” he said.
Shah said Trent’s breakout is backed by an improving price structure, marked by the formation of higher lows and signs of accumulation in the Rs 2,850-2,930 range. He added that the stock’s bullish outlook is likely to remain intact as long as it holds above the key support level of Rs 2,680.
Trading Strategy: Accumulate in the Rs 2,930-2,850 range (2.5 per cent), maintain a stop-loss at Rs 2,680 (8 per cent) and look for upside targets of Rs 3,350 and Rs 3,680, offering a potential return of 14-25 per cent over the medium term.
Bata India
Shah picked Bata India as a long-term investment view. “Bata India has undergone a sharp 72 per cent correction from its all-time high, bringing the stock back to a long-term support zone around Rs 600-650. Interestingly, the current decline is comparable in magnitude to the 2007-09 bear market correction, suggesting that a large part of the price damage may already be behind us,” he said.
“The monthly chart indicates that the stock has reached a historically significant demand area, where buyers have consistently stepped in during previous market cycles. After a prolonged downtrend, the pace of decline has slowed, and recent price action reflects signs of stabilization and accumulation near this support. From a technical perspective, such deep corrections into long-term support zones often provide favourable risk-reward opportunities for patient investors, provided the support continues to hold. While an immediate reversal cannot be confirmed yet, the probability of a meaningful medium- to long-term recovery improves as the stock sustains above the Rs 600 level,” he added.
“Investors may consider accumulating the stock gradually near current levels, keeping a strict stop-loss below the long-term support zone. A sustained move above the recent swing highs would confirm a trend reversal and could pave the way for a broader recovery over the coming quarters. Stock can be accumulated in the range of 700 to 670 with SL of 650. Upside up to 850.”
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
