Unlocking Next Week's Market Gems: Milan Vaishnav's Top Picks for Sustained Growth

In the dynamic world of stock markets, identifying potential winners before they make their big moves is every investor's dream. This week, we turn our attention to the insights of Milan Vaishnav, a distinguished CMT and MSTA, who has pinpointed two promising stocks poised for continued strength: Cummins India and Mahindra & Mahindra (M&M).

Vaishnav, the astute founder of Gemstone Equity Research & Advisory Services, offers a compelling technical rationale behind his selections.

His analysis suggests that both companies exhibit robust chart patterns and underlying momentum that could translate into significant gains over the next one to two months, provided market conditions remain favorable.

Cummins India: Powering Ahead

Cummins India has caught Vaishnav's eye due to its impressive technical setup.

The stock has been consolidating effectively above its crucial 200-Day Moving Average for a considerable period, a classic sign of underlying strength and accumulation. More recently, it has decisively broken out from a well-defined symmetrical triangle pattern, signaling a potential upside thrust. This breakout is further reinforced by a positive divergence against the Rate of Change (ROC), indicating that while price momentum might have seemed to slow, the underlying buying pressure was silently building.

Furthermore, Cummins India demonstrates superior relative strength when compared to the broader markets, suggesting it is outperforming its peers. The rising On-Balance Volume (OBV) also points to increasing buying interest, validating the bullish outlook.

For those looking to capitalize on this potential, Vaishnav suggests an entry with a target range of Rs 3,925 to Rs 3,980.

To mitigate risks, a disciplined stop-loss at Rs 3,680 is advised, maintaining a prudent risk-reward profile for a 1-2 month holding period.

Mahindra & Mahindra (M&M): Driving Towards New Highs

Another titan making Vaishnav's coveted list is Mahindra & Mahindra. M&M has been a stellar performer, consistently showcasing strong price appreciation.

After reaching new highs, the stock entered a phase of healthy consolidation within a narrow range, often a precursor to another upward leg. This consolidation phase recently culminated in a powerful breakout from a symmetrical triangle pattern, mirroring Cummins India's setup. Similar to his other pick, M&M also exhibits a positive divergence against the Rate of Change (ROC) and boasts a rising On-Balance Volume (OBV), underlining increasing buyer conviction.

Its robust relative strength against the broader market further solidifies its position as a potential outperformer.

Vaishnav has set a target range for M&M between Rs 2,520 and Rs 2,580. Investors should consider a stop-loss at Rs 2,360 to protect capital, with the expectation of realizing these targets within a 1-2 month timeframe.

Broader Market Context

While focusing on individual stocks, Vaishnav also offers a quick glance at the broader market.

He notes that the Nifty recently formed a potential inverted hammer candlestick pattern, an indicator that often suggests a possible reversal or indecision after a rally. However, his overarching view remains robust: as long as the Nifty maintains above the critical level of 22,200, the market's underlying strength is expected to continue, providing a favorable backdrop for his chosen picks.

This market resilience is crucial for the projected performance of Cummins India and M&M.

Investors and traders are encouraged to conduct their own due diligence and consult with financial advisors before making investment decisions, as market movements are subject to various influencing factors.