The analyst cited breakout patterns, volume confirmation, and strong earnings momentum in both stocks.
Two stocks offering attractive risk-reward setups are Chennai Petroleum Corporation and General Insurance Corporation of India (GIC). SEBI-registered analyst Palak Jain is bullish on these two stocks, driven by strong technicals and fundamental support.
Let’s take a look at her recommendations:
Chennai Petroleum
Jain noted a rounding bottom breakout above significant resistance, accompanied by strong volume buildup, in Chennai Petroleum. A daily relative strength index (RSI) above 67 and momentum indicators confirm a bullish turn.
She added that this leading South Indian refinery, with an improving product mix and cost controls, has a strong balance sheet, low debt, and stable book value, which support long-term prospects. It its June quarter earnings, it had reported weak margins but had contained its operational costs.
As crude cycles recover, this stock is poised to be a rerating candidate. Additionally, technicals suggest further upside, but risk management is essential due to volatile earnings, she cautioned.
Jain recommended buying Chennai Petro above ₹808, with a stop-loss at ₹726 for target prices of ₹832, ₹857, and ₹904.
Data on Stocktwits shows retail sentiment has been ‘neutral’ for a few weeks,
Chennai Petro shares have risen 32% year-to-date (YTD).
General Insurance Corporation of India (GIC)
Jain flagged a major resistance trendline breakout after a long consolidation at support for GIC shares, backed by improving weekly volume and bullish DMI signals.
This market leader in the reinsurance business has a strong return on equity (12%), and is supported by healthy reserves and improving underwriting performance. June quarter earnings saw profits rising 81%, along with robust expansion in margins and investment income.
Additionally, she noted that the technical setup points to risk-reward favoring fresh upside, with strong earnings momentum and attractive valuation lending further conviction.
Jain recommended buying GIC above ₹382, with a stop loss at ₹343 and target price of ₹393, ₹404, and ₹427.
Data on Stocktwits shows retail sentiment turned ‘bullish’ a day ago. It was ‘neutral’ last week.
GIC shares have declined 13% year-to-date (YTD).
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