Best Short Term Stocks to Buy: Features, Benefits and Risks

In the fast-paced Indian stock market, investors often seize opportunities to profit from short term price changes. While long-term investments are a solid strategy for building wealth, short-term trading can also be profitable for those willing to take on more risk and grasp market trends well. As 2024 approaches, identifying short term stocks to buy with strong growth potential and the chance for substantial gains becomes crucial.

Top 10 Short Term Stocks to Buy (2024)

Here are the top 10 stocks to buy for short-term in Nifty 500, based on their market capitalisation:

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data on this list is dynamic and subject to real-time changes. This data is derived from Tickertape Stock Screener.

• Stock Universe – Nifty 500
• All screens > Quality Drifters
• Market capitalisation – Sorted from highest to lowest

🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.

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Overview of the Top 10 Short Term Stocks to Buy in 2024

Here is a brief overview of the 10 best shares to buy today for short term on our list:

Sun Pharmaceutical Industries Ltd

Sun Pharmaceutical Industries Ltd was founded in 1983 and started operations in Kolkata with just five products for psychiatric conditions. They set up a small tablet and capsule manufacturing plant in Vapi, Gujarat, and opened an administrative office in Mumbai in 1986. By 1987, the company was marketing its products across India and began exporting to neighbouring countries in the late 1980s. Over the last 5 years, the company’s revenue has grown at a yearly rate of 10.64%, higher than the industry average of 9.21%, and its net income has grown at a yearly rate of 29.15%, also higher than the industry average of 15.15%. 

Hindustan Aeronautics Ltd

Hindustan Aeronautics Limited (HAL), a state-owned aerospace and defense company based in Bengaluru, operates under the Ministry of Defence. Founded by Walchand Hirachand in December 1940 as Hindustan Aircraft Limited, the government acquired a one-third stake in the company in 1941. HAL manufactured the HT-2 Trainer aircraft, which took its first flight in August 1951. In August 1963, the government established Aeronautics India Limited (AIL) to produce MiG-21 aircraft. In October 1964, Hindustan Aircraft Limited merged with AIL, forming the current HAL. Over the last 5 years, the company’s revenue has grown at a yearly rate of 9.65%, higher than the industry average of 8.49%, and its market share increased from 84.91% to 88.67%. 

Siemens Ltd

Siemens Limited is a technology company focusing on industry, infrastructure, digital transformation, transportation, and generating and transmitting electrical power. It represents Siemens AG’s flagship company in India. The company provides solutions for industrial applications in manufacturing, intelligent infrastructure, buildings, and clean power generation from fossil fuels, oil, and gas. Siemens Limited also handles the transmission and distribution of electrical energy, including passenger and freight transportation systems, rail vehicles, rail automation, and rail electrification. As of 17th September 2024, the company had a market capitalisation of Rs. 2,38,965.59 cr. and its share price closed at Rs. 6,763.90. 

Bharat Electronics Ltd

Bharat Electronics Limited (BEL) is a public sector company under the Ministry of Defence that focuses on aerospace and defence electronics. It designs, develops, manufactures, and supplies advanced electronic products and systems. Over the last 5 years, the company’s revenue has grown at a yearly rate of 11.34%, higher than the industry average of 11.25%, and its debt-to-equity ratio has been 0.27%, lower than the industry average of 11.56%.

ABB India Ltd

Abbott India Limited, an India-based company, operates in the pharmaceutical industry. It offers a range of products in diagnostics, medical devices, nutrition, and branded generic medicines. Abbott India provides solutions across various therapeutic areas, including women’s health, gastroenterology, central nervous system, metabolic, multi-specialty, and vaccines. Its notable products include Colospa for irritable bowel disease, Ganaton for gastrointestinal motility, Librax for irritable bowel disease, and Zolfresh for insomnia. As of 17th September 2024, the company had a market capitalisation of Rs. 1,62,838.87 cr. and its share price closed at Rs. 7,873.65. 

Cipla Ltd

Cipla Ltd, originally named Chemical, Industrial & Pharmaceutical Laboratories Ltd, was founded in 1935. Its founder, Khwaja Abdul Hamied, transferred all his patents and proprietary drug formulas to the company without charging royalties. The company was registered as a public limited company on 17th August 1935. Over the last 5 years, the company’s revenue has grown at a yearly rate of 9.51%, higher than the industry average of 9.21%, and its net income has grown at a yearly rate of 21.96%, also higher than the industry average of 15.15%. 

Eicher Motors Ltd

Eicher Motors Limited (EML) is a major player in the automobile industry, producing commercial vehicles, farm equipment, and the iconic Royal Enfield motorcycles. Renowned globally for its middleweight motorcycles, EML is listed on the BSE and the National Stock Exchange and is a part of the NSE index Nifty50. The company began in 1948 as Goodearth Company, focusing on selling and servicing imported tractors. In 1957, it became Eicher Tractor Corporation of India Ltd and, by 1959, launched India’s first locally made tractor from its Faridabad plant. Over the last 5 years, the company’s revenue has grown at a yearly rate of 11.46%, higher than the industry average of 7.94%, and its market share increased from 22.75% to 26.71%. 

Hero MotoCorp Ltd

Owned by the Munjal Brothers, Hero MotoCorp is the world’s largest two-wheeler manufacturer, producing 9.5 million units annually. The company operates eight manufacturing facilities: six in India and one in Colombia and Bangladesh. Hero MotoCorp originated from a collaboration between Japan’s Honda Motor Co. Ltd and Hero Cycles. Established in 1984 as Hero Honda Motors Ltd, the joint venture launched its first CD 100 motorcycle in 1985. Over the last 5 years, the company’s debt-to-equity ratio has been 3.49%, lower than the industry average of 27.77%, and its current ratio has been 174.36, higher than the industry average of 137.17. 

Zydus Lifesciences Ltd

Zydus Lifesciences Ltd., previously Cadila Healthcare Ltd., is a prominent pharmaceutical firm in India. Founded by Mr. I.A. Modi as Cadila Laboratories on 13th March 1952, the company initially launched Livirubra, a liquid vitamin supplement. In 1967, it set up its first factory. The company underwent a rebranding to Cadilac Pharmaceuticals in May 1995. Since then, it has developed a bulk drug production facility and an API plant in Ahmedabad, as well as a formulation unit in Jammu. Over the last 5 years, the company’s net income has grown at a yearly rate of 15.86%, higher than the industry average of 15.15%. 

CG Power and Industrial Solutions Ltd

Founded in 1937, CG Power & Industrial Solutions Limited manufactures electrical and transport equipment, as well as various machinery. It is part of the Murugappa Group. The company traces its origins to 1878, when Colonel REB Crompton established REB Crompton & Co. in England to produce and contract electrical equipment. In 1927, REB Crompton & Co. merged with F&A Parkinson Limited to form Crompton Parkinson Limited (CPL). Over the last 5 years, the company’s net income has grown at a yearly rate of 15.86%, higher than the industry average of 15.15%.

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How to Invest in Short Term Stocks to Buy?

Investing in short-term stocks involves buying shares with the intention of selling them within a short period, typically less than a year, to capitalise on price fluctuations. Here are key steps to consider:

1. Research and Analysis: Analyse market trends, company performance, and industry outlooks. Use technical analysis tools to identify potential entry and exit points.
2. Set Clear Goals: Define your investment goals and risk tolerance. Determine how much capital you can afford to invest and potentially lose.
3. Choose Liquid Stocks: You can select top stocks to invest in for the sort term with high liquidity to ensure you can quickly buy and sell without significantly affecting the stock price.
4. Stay Updated: It can be beneficial to keep abreast of market news, economic indicators, and earnings reports. These can influence stock prices and help you make informed decisions regarding the top stocks to invest in for the short term.
5. Use Stop-Loss Orders: Implement stop-loss orders to limit potential losses. This helps protect your investment if the stock price moves against your expectations.
6. Diversify Your Portfolio: Spread your investments across different sectors and industries to minimise risk.

What are Short Term Stocks?

Short term stocks are financial assets traded frequently and not held for long periods like long-term stocks. In India, shares held for less than 12 months are seen as short-term stocks. Profits from trading them are short-term capital gains. Investors in short term stocks, like day traders or swing traders, deal with various market-linked and debt instruments for trading. 

Types of Short Term Stocks to Buy

Short-term investment options offer various avenues for investors. Let’s explore them:

1. Treasury Bills: These are issued by the Central Government and traded in the bill market. They offer security as they are backed by the government, with their value determined through auctions. Despite their security, they provide moderate returns.
2. Commercial Papers: High-rated companies issue these to meet short-term financial needs. They carry a certain level of risk as stock market fluctuations influence them. Typically, they have fixed maturity periods ranging from 1 day to 270 days and are traded in the secondary market.
3. Certificate of Deposits (CDs): These are issued by banks and financial organizations. CDs are low-risk investments with returns higher than treasury bills. They offer liquidity and come with deposit tenures ranging from 7 days to 1 year. Investors can negotiate rates during issuance, making them suitable for various entities, including individuals and corporations.
4. Equity Shares: These short term shares to buy carry the highest risk among short-term investments and are issued by different types of companies. Mid-cap and small-cap companies’ shares offer the potential for significant returns but are highly influenced by market fluctuations. They are primarily traded through the primary and secondary markets.

Understanding these short-term investment options can help individuals and organizations make informed investment decisions.

Why Invest in Short Term Stocks?

Investing in short term stocks may offer opportunities for quick returns, appealing to traders and investors looking to capitalise on market volatility. These top stocks to invest in for the short term often experience rapid price movements due to earnings reports, market news, or economic data, potentially yielding gains within a short period.

Short term stocks provide liquidity, enabling investors to quickly buy or sell them to adjust their portfolios based on market conditions. Additionally, they allow for strategic positioning, which may help investors take advantage of specific market trends or sector performance.

While short term stocks can be risky due to their volatility, thorough research and timely decision-making may help manage these risks and optimise potential returns. By focusing on market trends and staying informed, investors can effectively navigate the fast-paced world of short term stock investments.

How to Select the Best Short Term Stocks to Buy?

Here are some effective ways to identify the best short-term stocks for your portfolio:

1. Market Analysis: Keep up with market trends and forecasts. Analyse economic indicators, sector performance, and market sentiment to make informed decisions about the best stocks to buy today in India for short-term gains.
2. Event-Driven Opportunities: You can look for short term investment stocks that react to specific events or news, such as product launches, regulatory approvals, or corporate earnings. These events often cause significant short-term fluctuations, presenting potential opportunities.
3. Technical Analysis: Use technical analysis to understand price movements and trends. This method involves studying patterns in stock prices and trading volumes to predict future activity and identify promising short term stocks.

Who Should Invest in Short Term Stocks to Buy in 2024?

Investors should choose short-term stocks based on their risk tolerance and investment goals.

• For those seeking steady income without risking their principal, non-market linked or fixed income financial instruments are ideal. These securities promise a return with interest after a set period, allowing investors to grow their capital safely.
• On the other hand, if investors aim to significantly increase their surplus funds and are willing to risk capital loss, they might consider equity shares. However, to achieve short-term gains, one must understand the stock market well.

A balanced approach involves diversifying investments across various short-term options to manage both risk and return effectively.

Features of Short Term Stocks to Buy in India for 2024

Here are a few features of short term stocks to buy in India:

• High Liquidity: Short term stocks typically have high trading volumes, ensuring investors can easily buy and sell without significantly affecting the stock price.
• Market Volatility: These stocks often exhibit higher price volatility, providing opportunities for possibly quick gains. However, this also means they carry higher risk.
• Strong Earnings Reports: Companies with positive and strong earnings reports are attractive short term stocks. Investors look for firms that show consistent quarterly growth.
• Sector Trends: Short term stocks often align with current market and sector trends. In 2024, sectors like technology, renewable energy, and healthcare may see increased activity, offering potential short-term investment opportunities.
• Analyst Recommendations: Stocks with recent upgrades or positive outlooks from market analysts can be ideal for short term gains.

Benefits of Investing in Short Term Stocks to Buy in India

Investing in short term stocks offers several advantages for investors looking to capitalize on immediate market opportunities. Here are the key benefits:

• Quick Returns: Short term stocks can yield fast returns due to their potential for rapid price movements within a short period.
• Flexibility: Investors can quickly respond to market trends, economic news, or corporate events, allowing for dynamic portfolio adjustments.
• Liquidity: The best short term shares to buy typically provide high liquidity, enabling investors to convert their stocks into cash swiftly without significant loss of value.
• Diversification: Including short term stocks in a portfolio can enhance diversification, spreading risk across different asset classes and investment horizons.

Challenges of Investing in Short Term Stocks to Buy for 2024

Short-term stock investments, while potentially lucrative, come with several key risks that investors need to understand.

• Market volatility: Stocks to invest for short term are highly sensitive to market conditions, influenced by daily news, economic indicators, and market sentiment. This can lead to rapid price swings, resulting in both large gains and significant losses in even the best stock for short term.
• Timing and execution: Short term investment in share market requires precise timing. Even small errors can turn potential profits into losses. Additionally, trading fees and taxes can reduce gains in even the best share for short term investments.
• Limited information: Investors often make short-term decisions based on trends rather than solid financial data. This can Increasing the risk of poor investments if market sentiment shifts, even in the case of the best stocks for short term investments.
• Emotional trading: The fast pace of short-term trading can lead to emotional decision-making, driven by fear or greed, which may amplify losses in unpredictable markets.
• Regulatory and political risk: Even the best stock for short term investments are more exposed to changes in regulations or political instability, which can significantly impact stock prices.
• Over-leveraging: Some investors may borrow capital to increase potential returns, but this also raises the risk of losses that could exceed their initial investment.

Factors to Consider Before Investing in Short Term Stocks to Buy in 2024

Here are a few factors to consider when investing or when considering investments in short term stocks to buy:

1. Company Basics and Growth Prospects: Evaluate a company’s assets and potential for growth to understand its fundamentals.
2. Catalysts for Short-Term Price Changes: Identify factors like company events or industry trends that could influence stock prices in the short term.
3. Technical Research and Chart Patterns: Use technical analysis to study chart trends and indicators, helping you pinpoint potential entry and exit points.
4. Risk Control Techniques: Implement strategies like position sizing and stop-loss orders to manage risk and limit potential losses.
5. Trading Fees and Flow: Consider the costs associated with trading to understand their impact on your overall returns.
6. Personal Risk Tolerance and Investing Goals: Align your trading strategies with your risk tolerance and investment objectives.

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To Wrap It Up…

In the dynamic Indian stock market, short-term investing offers opportunities for quick gains through rapid price changes. This article highlights a list of top performing short term stocks, each with unique growth potential and short-term triggers.

However, it’s crucial to approach short-term trading with caution. Investors need to conduct thorough research, implement risk management strategies, and align their investments with their risk tolerance and financial goals. Combining fundamental and technical analysis with effective risk management can allow investors to capitalise on short-term opportunities while minimising potential risks.

Frequently Asked Questions on Short Term Stocks