Brokerage selected 2 stocks for Friday: You can get strong returns of 10 to 15% in the next 10 days; Know target and stoploss

In the Indian stock market, there is strong movement in selected sectors and stocks amidst consolidation around the key levels of Nifty 50 and Sensex. Continued buying by domestic institutional investors (DIIs) and selective inflows by foreign institutional investors (FIIs) have created new ground for rally in largecap to quality midcap stocks. Market analysts believe that in such a volatile environment, adopting a stock-specific strategy instead of placing big bets on the index proves to be most beneficial. Keeping in mind Friday’s trading session, leading research analysts and brokerage houses have identified two such stocks for the short-term i.e. next 7 to 10 trading sessions, which are showing fresh breakouts on the charts and strength of momentum indicators.

Action Construction Equipment Limited (ACE), a leading company in the infrastructure and capital goods sector, looks very strong on both technical and fundamental fronts. This company is directly benefiting from the rapid increase in infrastructure development, Gati Shakti Yojana and manufacturing capex in India.

• Current Market Price (CMP): Approximately ₹1,121

• Recommended Entry Range (Buying Zone): ₹1,115 to ₹1,125

• Short-term target (Target Price): ₹1,225 to ₹1,240

• Strict Stop Loss: ₹1,070 (on closing basis)

• Estimated Potential Profit (Upside): From 9.5% to 11%

Talking about technical analysis, on the daily chart this stock is trading well above its 20-day and 50-day exponential moving average (EMA). The stock has broken the sideways consolidation range that has been going on for the last few weeks with 1.8 times higher than average trading volume. The Relative Strength Index (RSI) is at the level of 64, which is neither in the overbought zone nor weak, but there is full room for a new bullish move ahead. According to the brokerage, the stock can easily cross its first resistance of ₹1,200 and reach the level of ₹1,240 in the next 8 to 10 trading days.

Brokerage houses have advised buying short-term delivery on Apollo Micro Systems Limited, a strong midcap company in the defense and aerospace sector. The company’s order book is at a record high due to the ‘Make in India’ defense initiative and continuous orders from the Defense Ministry.

• Current Market Price (CMP): approximately ₹413

• Recommended Entry Range (Buying Zone): ₹408 to ₹415

• Short-term target (Target Price): ₹465 to ₹475

• Strict Stop Loss: ₹390 (on closing basis)

• Estimated Potential Profit (Upside): From 12.5% ​​to 15%

On the daily chart, Apollo Micro Systems has completed a classic breakout of the ‘Cup and Handle’ pattern. The structure of higher-high and higher-low is continuously intact on the chart, which shows that smart money and big traders are buying in every small dip. The Moving Average Convergence Divergence (MACD) indicator has given a fresh bullish crossover above the zero line. Analysts estimate that the risk-to-reward ratio is extremely favorable from current levels with a closing stoploss of ₹390, where traders can make profits in the ratio of 1:2.5 to 1:3.

When taking positions in the stock market for a short period of time (10 to 15 days), the more attractive the return potential is, the more essential is risk management. Market experts have given some basic rules which need to be followed:

• Capital Allocation Rules: Do not invest more than 10% to 15% of your total trading capital in any one short-term stock. Due to this, even if for some reason the stoploss is triggered, your overall portfolio does not suffer a major blow.

• Closing Basis Stoploss: Many times during intraday, the price goes down and goes up again. Therefore, always evaluate the stoploss at the closing price after 3:15 pm.

• Use of Trailing Stoploss: As soon as the stock gets close to your first target (e.g. 5-6% upside), move your stoploss to your cost price. This makes the trade completely risk-free.

Equity investment in the stock market is subject to market risks. Before investing or trading in any share, assess your risk appetite and consult a SEBI registered financial advisor or research analyst. The analysis presented is for educational and informational purposes only.