Short-Term Stocks to Buy in India

In the ever-dynamic Indian stock market, buyers constantly find opportunities to bank on short-term price changes and make quick gains. While long-term buying remains a sensible strategy for building wealth, short-term trading can also be successful for those with a higher risk appetite and a keen understanding of market trends. As we near 2024, finding possible short-term stocks that offer good growth possibilities and the potential for significant gains within a relatively short time frame becomes increasingly essential.

Short-term stocks are those with good financial fundamentals but haven't yet gained momentum. Investors often look for these stocks to generate high returns on investment (ROI) in a short period. Such short-term trading is mostly successful for those who have a higher risk appetite and possess a strong understanding of the market trends.

In this article, let’s check out some of the best short-term stocks with immense growth potential. Also, we will learn the various factors to be considered before investing in short-term stocks.

For those unaware, short-term stocks are shares of companies that are expected to witness significant price fluctuations in the short term, like a few weeks to a few months. Especially these price changes occur due to events such as:

• Mergers and acquisitions (when companies combine or one company buys another)
• Spin-offs (when a company creates a new independent company from part of itself)
• Product launches (introducing new products to the market)
• Rapidly changing industries (industries growing or evolving quickly)

If you are planning to invest in short-term stocks, follow these tips:

• Monitor market trends and keep a close eye on how the market is moving.
• Study technical signs and analyse charts and indicators that show patterns in stock prices.
• Time your buy and sell decisions by buying stocks when prices are low and selling them when prices go up.

However, it must be noted that short-term stock prices can be very volatile, and there's a higher chance of losing money. However, short-term trading can also lead to significant profits. Hence, we can say that short-term trading has the potential for high rewards and higher risks.

Investing in the best short-term stocks is a good strategy for making quick gains. This is usually done by taking advantage of:

• Market mispricing
• Diversification
• Key corporate events

However, it requires a good understanding of the market and a willingness to take on higher risks. Below are some top stocks you can consider buying for short-term in India:

• ICICI Bank
• Tata Motors
• Adani Green Energy
• SRF Limited
• Infosys Limited
• Maruti Suzuki India Limited
• Avenue Supermarts Limited
• Bajaj Finance
• Zomato
• Reliance Industries Ltd.

Only the informed can succeed in the ever-competitive financial markets. Learn about the two major securities stocks and ETFs, and compare how they differ.

For more clarity on the stocks mentioned above, read their overview and understand why they are a good short-term pick:

• ICICI Bank
  ICICI Bank is a leading private-sector bank in India. The bank is technologically advanced and uses modern techniques to improve customer experiences. You can prefer investing in ICICI Bank as the Indian economy is expected to recover/ rebound, which can significantly benefit the company. Also, their focus on digital projects and solid risk management position them well for growth.
• Tata Motors
  Tata Motors is one of India's leading car manufacturers. Capitalising on the Electric Vehicle (EV) trend, the company is making significant progress in the electric vehicle market. Even the Indian government is encouraging sustainable transport, which will increase the demand for electric vehicles and benefit Tata Motors.
  You can prefer investing in Tata Motors as they have several new EV launches planned and are likely to benefit from the growing EV market in 2024. Also, they have a strong presence in the commercial vehicle segment, which adds to their potential for growth.
• Adani Green Energy
  Adani Green Energy is a major player in the green energy sector in India. The Indian government strongly promotes green energy that can benefit the company in the short term. You can prefer investing in Adani Green as there is expected an increasing demand for clean energy. Also, they have ambitious growth plans and a strong pipeline of projects.
• SRF Limited
  SRF Limited is a diversified company involved in chemicals, textiles, and packaging. As per recent estimates, an increase in industrial activity is expected, which will benefit them. You can prefer investing in SRF Limited due to its solid financial position and diverse business interests.
• Infosys Limited
  Infosys is a leading global player in IT services. They have a history of strong financial performance and significant client contracts. With the rising need for digital transformation, Infosys is focusing on new technologies like artificial intelligence (AI) and cloud computing.
  You can prefer investing in Infosys as the demand for digital transformation services is growing, and Infosys is well-placed to benefit from it. The company has made considerable investments in new technologies and has maintained strong client relationships, which makes it a good short-term investment.
• Maruti Suzuki India Limited
  Maruti Suzuki is the largest private car manufacturer in India. It has a strong market share and a well-established brand. The industry outlook is that the overall car sector is expected to improve revenue collection, and Maruti Suzuki plans to launch new car models.
  You can prefer investing in Maruti Suzuki due to the expected increase in demand for passenger vehicles. Also, their dominant market position and efficient production methods make them a strong candidate for short-term growth.
• Avenue Supermarts Limited (D-Mart)
  Avenue Supermarts is the company behind the popular D-Mart store chain in India. They emphasise business efficiency, offer good value for money, and have smart growth plans. You can prefer investing in the company due to its unique business model and customer-focused approach.
• Bajaj Finance
  Bajaj Finance is a leading non-banking financial company (NBFC) in India. It specialises in consumer loans and has strong risk management practices. The company is expanding its digital presence through innovative digital services that make it easier for customers to access its products online.
  You can prefer investing in Bajaj Finance as there is an increasing demand for consumer finance, on which the company is well-positioned to capitalise. They also plan to launch new financial products, which could attract more customers. Their solid management and customer base make them a promising short-term investment.
• Zomato
  Zomato is a leading food delivery app in India. Considering market trends, the demand for online food delivery is increasing. Nowadays, more and more people are ordering food online for convenience. You can prefer investing in the company as they are expanding their services and improving efficiency. Also, they have a well-known brand name and the potential to gain more market share.
• Reliance Industries Limited (RIL)
  RIL is a large and diverse company involved in various industries. The company has always focused on innovation and growth. They are expanding into new business areas, such as the telecom industry (Jio), which has been a significant success. Furthermore, the company is investing in green energy projects, which are likely to further boost its growth.
  You can prefer investing in RIL as the company has a strong financial position and has several trending projects lined up. Also, they are forward-thinking and innovative, which bodes well for their short-term performance.

It is worth mentioning that short-term trading is riskier than long-term investing. However, it can be rewarding for those who understand market trends and have a higher risk tolerance. By investing in the best short-term stocks, you can make quick gains by taking advantage of rapid price changes. Additionally, you can:

• Profit from market mistakes
  Sometimes, the market misprices stocks. Taking advantage of this situation, short-term traders profit by buying undervalued stocks and selling them when the prices correct.
• Diversify and grow
  Investing in short-term stocks allows you to spread your investments across different sectors. This way, you get exposure to businesses that are expected to grow quickly, such as those launching new products or undergoing mergers.
• Manage risk
  You can manage your risk by using strategies like setting a limit on how much you invest in each stock (position size) and using stop-loss orders to sell a stock if its price falls to a certain level.

Also, read what is SEBI and how it protects investor interests.

A thorough research and analysis based on some important factors can help you better manage the risks associated with short-term stock trading. Let’s check out these factors:

• Check company fundamentals: Look at the company's financial health, business model, and overall growth potential.
• Spot key events and trends: Identify specific events or industry trends that might cause the stock price to change in the short term. Some common examples of such events are product launches, earnings reports, and major industry developments.
• Perform technical analysis: Use chart patterns and technical indicators to analyse stock price movements. This helps in finding the best times to buy and sell.
• Identify ideal position size: Decide how much money to invest in each stock. This will help you better manage risk and protect your capital.
• Place stop-loss orders: Set a price at which you will sell the stock if it starts to lose value. Stop-loss orders limit potential losses and, in a way, enhance your overall portfolio returns.
• Assess liquidity: Make sure the stock is easy to buy and sell without significantly affecting its price.
• Identify your risk tolerance: Understand how much investment risk you can tolerate. Also, make sure that the investments you make align with your financial goals.

Short-term stocks are shares of fundamentally strong companies that are expected to experience significant price changes within a short period (usually a few weeks to a few months). These stocks often benefit from specific events like product launches, mergers, or industry trends. By investing in short-term stocks, investors can attain quick gains. However, such kind of trading is often recommended for investors with a good understanding of market trends and a higher risk tolerance.

Some of the best short-term stocks you can prefer investing in are Adani Green Energy, Maruti Suzuki, Zomato, Tata Motors, Bajaj Finance, Reliance Industries, SRF Limited, ICICI Bank, Avenue Supermarts, and Infosys. These companies have strong fundamentals and growth potential mostly driven by events like product launches and industry trends.

Furthermore, to succeed in short-term trading, it's important to monitor market trends, perform technical analysis, and manage risks with strategies like position sizing and stop-loss orders. While short-term trading carries higher risks, it can be rewarding for investors who do thorough research and carefully manage their investments.

Do you know about OTC, an alternative platform for companies to raise capital? Check out what is OTC and how it works. Also, learn how to buy OTC stocks in India.