Nifty 50 index lost 33 points and ended at 19,730 levels, BSE Sensex went down 187 points and closed at 65,794 mark while Nifty Bank index corrected 577 points and ended at 43,583 levels. Broad market indices ended little in the positive even as the previous decline ratio, although positive at 1.16:1, dipped above the previous day.
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Stock market strategy for Monday
Sumeet Bagadia, Executive Director at Choice Broking believes that Nifty 50 index faces resistance at 19,800 to 19,850 zone. An expert from Choice Broking went on to add that overall bias of Indian stock market is positive till Nifty trades above 19,650 levels. On stocks to buy next week, Sumeet Bagadia recommended three stocks to buy on Monday – Asian Paints, Dr Reddy’s Laboratories and Grasim Industries.
Sumeet Bagaia’s stock recommendations
1) Asian Paints: Buy at ₹3169, purpose ₹3330, stop loss ₹3085.
Asian Paints stock is currently trading at ₹3168.90 levels. The share price of Asian Paints showed a sharp rebound from the support of ₹3085 levels, which is also close to its 20-day EMA levels. The stock also formed two bullish candlesticks on weekly charts after forming a doji candlestick at the support levels. We can witness a small resistance of ₹3230, once a stock closes above its resistance, the stock will move to the further resistance of ₹3310 levels.
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The RSI indicator is also comfortably trading at 62 levels which shows the strength for the stock to move up. ASIANPAINT currently trades mainly on major moving averages.
We recommend buying shares of Asian Paints at CMP of 3168.90 levels. It can also be bought nearby ₹3125 with a medium-term target price of ₹3310. Our analysis will be considered invalid if the price closes below the levels of Rs 3085.
2) Dr Reddy’s Laboratories: Buy at ₹5611, purpose ₹6055, stop loss ₹5380.
Dr Reddy stock is currently trading at ₹5611.55 and recently experienced a break of the daily trend line with robust volume. If the price exceeds ₹5665, it could possibly gain bullish momentum. It is prudent to consider buying opportunities around the ₹5500 level in case of any corrections.
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Additionally, the technical indicators of Dr Reddy’s Laboratories shares are generally bullish. The stock closed above key moving averages, including the 50-day, 100-day and 200-day Exponential Moving Averages (EMA), signaling strength across various time frames. The Relative Strength Index (RSI) stands at 61, suggesting balanced momentum with room for further price appreciation.
In short, with a solid foundation, strong moving average performance and robust momentum, Dr Reddy stock seems well positioned for a bullish trajectory. To manage risk sensibly, it is advisable to set a stop-loss (SL) at ₹5380. This precaution will help protect your investment in case of an unexpected market reversal. Traders and investors may want to explore potential long positions, while also being prepared to buy on dips around ₹5500. The short term target range could be ₹5840 and ₹6055.
3) Grasim Industries: Buy at ₹1972, purpose ₹2077, stop loss ₹1910
Grasim’s share price is currently trading at ₹1972, demonstrated remarkable strength in its technical indicators. The stock has successfully closed above its short, medium and long term moving averages, specifically the 50, 100 and 200 EMA, indicative of a positive trend.
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The Relative Strength Index (RSI) stands at 62, suggesting healthy momentum without entering overbought territory. Additionally, the Average Directional Index (ADX) is registering a moderately strong reading of 21, indicating a trend in progress.
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With a side to positive bias, Grasim share price exhibits characteristics of a possible upward trend. The stock has just finished a consolidation phase and has the promise of a big increase once the critical resistance level of ₹2000 to ₹2015 is broken. Considering these technical factors, the current market conditions present a favorable buying opportunity at the current level of ₹1972.
A cautious strategy for investors may involve starting a long position with a stop-loss set at ₹1910 to manage potential downside risks. The suggested target for this trade is ₹2077, reflecting the anticipated upward movement based on the technical analysis.
Disclaimer: The views and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decision.
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Updated: 18 Nov 2023, 15:53 IST
(tagsTo Translate)Buy or sell