In a period marked by significant market volatility and a highly selective earnings season, Akshay Bhagwat, Associate Director for Derivatives Research at JM Financial Services, has identified two compelling stock opportunities: Divi's Laboratories Ltd (Divi's Labs) and Hindustan Unilever Ltd (HUL).
Selective Bets in a Nervous Market
Bhagwat's recommendations come as the broader market maintains a cautious mood, with the Nifty index hovering around the 24,000 mark. Global tensions and weak short-term momentum have contributed to trader apprehension, making it a "stock picker's market," where individual technical setups become paramount.
Divi’s Lab Gets the Technical Nod
Among pharmaceutical stocks, Divi's Labs stands out for its promising technical structure. Bhagwat noted a significant breakout for Divi's Labs above the ₹7,000 level last week. This breakout suggests potential for further gains, with technical charts indicating an upside target of approximately ₹7,600 in the short to medium term. For traders, a crucial risk management point would be to maintain stop losses below the ₹7,000 mark. The scrip closed Wednesday's session at ₹7,386.75 apiece.
HUL Stock: A Safer Bet Amid Turbulence
Shifting focus to the Fast-Moving Consumer Goods (FMCG) sector, Bhagwat highlighted Hindustan Unilever (HUL) as a defensive play. He described HUL as one of the "safer names" for investors seeking stability amidst market turbulence. For HUL, the key support level is pegged at ₹2,100, with potential trading pullbacks extending towards ₹2,250 in the near term. This choice underscores a broader market inclination towards quality defensive stocks when the overall index direction remains uncertain and risk appetite is uneven. HUL shares settled at ₹2,157 on BSE.
These two picks encapsulate the current market strategy: pursue momentum only where technical setups are robust, and balance such plays with defensive stocks capable of holding ground if volatility intensifies.