UBL, CDSL: 5 oversold mid-, small-caps to bet on amid hopes of mkt reversal

Few oversold stocks have now reached their crucial levels that resulted in a robust breakout earlier. These are resilient cushions, with underlying strength capable of holding accumulative stance

After the domestic market reversed three-times near their recent lows, the prospect of sustainability appears to be on the horizon. The BSE Sensex and Nifty 50 succeeded to hold ground near their previous reading range of 59,680 -59,620 and 19,780- 17,760, respectively, and until this cushion is defended, the probability of bulls riding the up move intensifies. 

 

While the India VIX trades in a broad range of 17 – 14 marks, a breach of 14 could garner reasonable volatility in turn assisting leading indices to take a clear route.

 

Meanwhile, the recent volatility has pushed several stocks in the oversold territory, amid mounting sell-off. Those of Bajaj Twins, Berger Paints, L&T Technology Services, Central Depository Services( India), Asian Paints, Laurus Labs, UBL , Trent, etc  have lost significant value in their stock prices plummeting in the range of 10 - 5 per cent. 

 

However, few of these oversold stocks have now reached their crucial levels that resulted in a robust breakout earlier. These are resilient cushions, with underlying strength still capable to reap accumulative stance. 

 

Shares of Trent and Elgi Equipments on Monday were trading in the green, while Central Depository Services, Zee Entertainment Enterprises and United Breweries traded on a flat note. 

Here's the technical outlook of these mid-small cap stocks highlighting a reversal trend:-

 

Central Depository Services (India) Ltd (CDSL)

Likely target: Rs 1,205

Upside potential: 12%

 

While the stock has repeatedly failed to overcome the hurdle of the 200- day moving average (DMA) set at Rs 1,205-mark since last November, the current price levels are nearing the accumulative phase witnessed in June and July 2022. The range of Rs 1,080 – Rs 1,050 has seen robust buying during the same period. If the accumulation repeats, the quick reversal could easily regain strength to surpass the 200-DMA mark. The candlestick formations suggest continuous sell-off now needs to rest and bulls can easily capitalize on this. CLICK HERE FOR THE CHART

 

Zee Entertainment Enterprises Ltd (ZEEL)

Likely target: Rs 245 and Rs 260

Upside potential: 6% to 12%

 

There is a divergence of the Relative Strength Index (RSI), which is positively affecting the stock. The price action has breached the earlier low, while the RSI has not broken the previous reading. This improves the bullish strength from the price perspective, which shall garner an up move sentiment in coming sessions. If the stock sees sideways move, the probability of a bigger decline appears to be negligible. The immediate hurdle for the stock is at Rs 245 levels, followed by Rs 260. CLICK HERE FOR THE CHART

 

United Breweries Ltd (UBL)

Likely target: Rs 1,681 and Rs 1,697

Upside potential: 5% - 6%

 

After witnessing a sharp fall of over 10 per cent from Rs 1,806.56 levels, which is its 52-week high, the counter has fallen to the 200-day moving average (DMA) support placed at Rs 1,609 mark. The stock is in the oversold territory of the Relative Strength Index (RSI) breaching 30-value. Thus, if the stock holds ground at its significant support mark of 200-DMA, a sharp reversal could propel a rally in the direction of Rs 1,681 and Rs 1,697, which are its 100-DMA and 50-DMA levels. The following support for the stock is at Rs 1,570 level, which has held robust cushion in April last year.  CLICK HERE FOR THE CHART

 

Trent Ltd (TRENT)

Likely target: Rs 1,300 and Rs 1,400

Upside potential: 8% to 16%

 

There is a breakout of “Double Bottom” at Rs 1,125 in July last year and it has become a support mark for any reversal. While the stock price is approaching to test this support, any accumulation on the way could bolster medium-to-long term investment.  The immediate barrier for stock is at Rs 1,300 and Rs 1,400 levels. Only if the stock falls beneath Rs 1,000 level, the medium-term trend would then shift into a bearish phase. CLICK HERE FOR THE CHART

 

Elgi Equipments Ltd (ELGIEQUIP)

Likely target: Rs 460 and Rs 480

Upside potential: 12% to 15%

 

The stock is hovering around the 200-DMA mark of Rs 416 since last 8 days, with RSI firmly holding ground after jumping above the oversold territory.  Whenever the stock close over Rs 420, the breakout would see immediate reach to Rs 460 and Rs 480 levels, shows the daily chart. Only a breakdown beneath Rs 390 could negate the positive bias. CLICK HERE FOR THE CHART