Anand Rathi Analyst Picks Three Stocks for Short-Term Gains, Including Dixon Technologies.

Market Volatility Persists as Nifty 50 Remains Range-Bound

The Indian market barometer, Nifty 50, remained range-bound for the week ended 22 May, influenced by ongoing uncertainties around a potential US-Iran peace deal, elevated crude oil prices, and the Indian rupee's weakness. The Nifty 50 largely traded within the 23,300–23,850 zone, ending the week with a nominal gain of 0.32%.

Investor sentiment is likely to remain cautious in the near term, with developments around the potential US-Iran deal, crude oil prices, and dollar-rupee exchange rate expected to impact market sentiments. On the technical front, Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, noted that the Nifty 50 continues to consolidate within the broader 23,300–23,850 range, indicating ongoing volatility and indecision in the near term.

Despite intermittent weakness, the index has managed to hold above the crucial 23,300 support zone, keeping the broader market structure intact. Patel believes that a decisive breakout and sustained move above 23,850 could trigger the next leg of the rally and gradually open the path towards fresh highs in the coming months. The immediate resistance for the Nifty is seen at 24,200, followed by stronger hurdles around 24,600 and eventually the psychological 25,000 mark.

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On the downside, Patel believes the broader trend is expected to remain constructive unless the index slips below the important 23,100 support zone. Traders are advised to maintain a cautiously optimistic and stock-specific approach, as selective sectors and quality setups are likely to outperform amid ongoing volatility.

Bank Nifty Witnesses Heightened Volatility

The Bank Nifty witnessed heightened volatility during the week and successfully filled the important gap support near the 52,800 zone, which also coincides with the 61.8% Fibonacci retracement level. According to Patel, the index has since shown signs of stabilisation and consolidation, indicating the gradual emergence of buying interest from lower zones.

The immediate hurdle for the banking index is placed near 54,500. A decisive breakout above this level could trigger a strong up move in banking stocks and significantly improve overall market sentiment. Once 54,500 is crossed convincingly, Bank Nifty has the potential to outperform the broader markets and may head towards the 56,000–58,000 zone in the coming weeks, supported by strength in heavyweight private banking names and improving momentum indicators.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Stock Picks for the Short Term

Jigar Patel recommends buying the following three stocks for the next 1-2 weeks:

Patel highlighted that Dixon Tech has witnessed a strong bullish breakout after surpassing its previous swing high (B point) on a closing basis, as depicted in the chart. Momentum indicators continue to support the positive outlook, with RSI, MACD, and DMI all indicating strengthening bullish momentum and improving trend structure.

Considering the overall technical setup, traders may consider buying in the ₹11,800–₹11,600 zone, with a stop loss at ₹11,000. On the upside, the stock has the potential to move towards the ₹13,000 target in the coming weeks.

Patel pointed out that Aarti Industries has recently witnessed a strong breakout above its major Yearly Camarilla (R 4) and Floor Pivot resistance levels (R 1) on the monthly chart. Importantly, the stock has also successfully retested the breakout zone, which is now expected to act as a strong support area going forward.

Considering the overall technical structure, traders may consider accumulating the stock in the ₹480–₹460 zone, with a stop loss at ₹435. On the upside, the stock has the potential to move towards the ₹540 target in the coming weeks.

Patel said Ramco Cements has formed a strong base near the ₹880–₹900 zone, indicating stability at lower levels. As per Patel, the support zone is well supported by the 78.6% Fibonacci retracement, 61.8% AB=CD Alternate Price Relationship, and the 1.27% external retracement, making the ₹900–₹890 zone a crucial demand area.

Considering the overall technical setup, traders may consider buying in the ₹920–₹900 zone, with a stop loss at ₹870. On the upside, the stock has the potential to move towards the ₹990 target in the coming weeks.