Friday Stock Picks: Technical Breakouts Signal Bullish Momentum Across Sectors

Indian equity benchmarks concluded lower on Wednesday, despite a 25 basis point repo rate cut by the Reserve Bank of India. Market participants remained cautious and this was reflected in the public sector banks that were hit the hardest in trading. They were hit because of overall weakness in the IT and banking stocks. 

The stocks that fell the most included:

1. HDFC Bank

2. Infosys

3. Tata Consultancy Services

The above stocks as well as others in the sector accounted for a huge part of the losses that occurred in the Indian equity market. At the close, the BSE Sensex was down 379.93 points and the Nifty 50 was down 136.70 points.

Breakouts Indicate Sectoral Strength

In the midst of overall market unpredictability, a few specific stocks are showing pretty clear signs of strength. Orient Cement is one of them. It broke out of a tough range that it was stuck in for about six months when it got to this new trading level of INR 356. The way that it got there was also pretty impressive; it made a strong advance with a bullish-looking candlestick that had more than enough volume to back it up. In this case, it's quite possible that new buying interest is being rekindled after a few months of fewer buyers on the scene.

In the same way, Ambuja Cements is showing a breakout above its 10-day EMA and signs of fresh strength. The stock has the RSI in a bullish crossover, and the analysts are seeing potential for the stock to advance toward INR 580 as long as it maintains support at INR 534.

HUDCO and NBCC Show Structural Bullishness

The stock of HUDCO is in the spotlight, having recently crossed some significant technical levels. Right now, it's around INR 212.85. If you look at the volume, it's kind of high. And if you look at the way the stock is situated above some short and long-term moving averages, it's looking good. I wouldn't be surprised at all if we see it push through INR 214, which could lead it to target some zones between INR 254 and INR 264.

NBCC, which is currently trading at INR 87, is gaining attention due to a breakout from a descending trendline. The RSI is at 59 and still climbing, while a sustained move above INR 88 could trigger more upside toward targets of INR 100 and INR 103. For those who don't want to chase an already breaking stock, support at INR 83 gives you a safe place to look for potential reverse moves before buying in.

High-Value Stocks Like DMART and Pidilite Signal Uptrend

Among counters with higher prices, DMART is gaining attention after clearing a double bottom pattern. Trading above all significant EMAs and backed by an RSI of 66.25, the stock appears primed to reach higher levels of INR 4,600 and INR 4,700. Pidilite Industries, currently around INR 2,930, has also displayed strength with what's called a falling trendline breakout, and a bullish RSI crossover backing it up. Analysts see this move as potentially setting the stock on an uptrend toward INR 3,075, as long as it remains above an important support level of INR 2,828.

When trending selectively bullish and providing volume support, a technical breakout may furnish traders with a strong short-term opportunity in a market that otherwise fosters caution.