Nifty 50 index lost 33 points and ended at 19,730 levels, BSE Sensex went down 187 points and closed at 65,794 marks and Bank Nifty index corrected 577 points and ended at 43,583 levels. Broad market indices ended slightly positive even as the pre-reduction ratio, albeit positive at 1.16:1, fell on the previous day.
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Stock market strategy for Monday
Sumeet Bagadia, Executive Director at Choice Broking believes that Nifty 50 index is facing resistance at 19,800 to 19,850 zone. An option brokerage expert said that the overall trend in Indian stock market is positive till Nifty is trading above 19,650 level. Regarding buying stocks next week, Sumeet Bagadia recommended three stocks to buy on Monday – Asian Paints, Dr Reddy’s Laboratories and Grasim Industries.
Sumeet Bagaia stock recommendations
1]Asian paints: Buy at ₹3169, target ₹3330, stop loss ₹3085.
Asian Paints share is currently trading at ₹3168.90 levels. Asian Paints share price showed a sharp bounce from support from ₹3085 level which is also close to its 20 Day EMA levels. The stock has also formed two bullish candles on weekly charts after forming a doji candle at the support levels. We can witness a little resistance ₹3230, once a stock closes above its resistance, the stock will move towards additional resistance ₹3310 levels.
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The RSI indicator is also trading comfortably at 62 levels which shows the strength for the stock to move up. ASIANPAINT is currently trading above key moving averages.
We recommend buying Asian Paints shares at a CMP of 3168.90 levels. It can also be bought near ₹3125 with a medium-term target price of ₹3310. Our analysis will be considered invalid if the price closes below Rs 3085 levels.
2]Dr Reddy’s Laboratories: Buy at ₹5611, goal ₹6055, stop loss ₹5380.
Dr Reddy’s share is currently trading at ₹5611.55 and recently there is a breakout in the daily trend line with strong volume. If the price exceeds ₹5665, it could gain bullish momentum. It is prudent to consider buying opportunities around the ₹5500 levels in case of any correction.
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Additionally, technical indicators for Dr Reddy’s Laboratories shares are generally bullish. The stock has closed above key moving averages, including the 50-day, 100-day and 200-day Exponential Moving Averages (EMA), indicating signal strength across different time frames. The Relative Strength Index (RSI) stands at 61, indicating balanced momentum and the possibility of further price appreciation.
In summary, with a strong base, strong moving average performance, and strong momentum, Dr. Reddy’s stock seems well positioned for a bullish trajectory. To manage risk prudently, it is advisable to set a stop loss (SL) at ₹5380. This precaution will help protect your investment in the event of an unexpected market reversal. Traders and investors may want to explore potential long positions, while also being ready to buy on dips around ₹5500. The short term target range could be ₹5840 and ₹6055.
3]Grasim Industries: Buy at ₹1972, goal ₹2077, stop loss ₹1910.
Grasim’s share price is currently trading at ₹1972, having shown significant strength in its technical indicators. The stock managed to close above the short, medium and long-term moving averages, specifically the 50, 100, and 200 EMA, indicating 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) registers a relatively strong reading of 21, indicating an uptrend.
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Alongside a positive trend, Grasim’s share price shows signs of a potential upside. The stock has recently completed a consolidation phase and there is promise of a significant bottom once the critical resistance level is reached ₹2000 to ₹2015 exceeded. Considering these technical factors, the current market conditions present a favorable buying opportunity at the current level ₹1972.
A prudent strategy for investors may involve initiating a long position with a stop-loss setup at ₹1910 to manage potential downside risks. It is the recommended target for this trade ₹2077, which indicates the upward movement that is expected based on the technical analysis.
Disclaimer: The above opinions and recommendations are the opinions and recommendations of individual analysts or brokerage firms, and are not the opinions of Mint. We encourage investors to check with certified experts before making any investment decision.
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Updated: 18 November 2023, 03:53 PM IST
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