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Buy or sell shares: After showing an excellent upside recovery from Thursday’s lows, the Indian stock market entered a range-bound action throughout the session on Friday and closed in the red territory. The Nifty 50 index shot up 4 points and closed at the level of 22,212, the BSE Sensex fell 15 points and ended at the level of 73,142, while the Bank Nifty index lost 108 points and ended at the level of 46,811.
After opening on a positive note, the Nifty 50 index failed to sustain the initial gains and fell into minor weakness amid a range move at first and then this sideways move continued throughout the session. A new all-time high was formed at 22,297 levels and the 50 stock index closed near the lows.
Stock market strategy for next week
Sumeet Bagadia, CEO, Choice Broking, believes that the Nifty 50 index decisively surpassed the crucial 22,000 level in the past week. The Choice Broking expert added that the overall sentiment of the Indian stock market is positive. Bagadia advised a “buy dips” strategy until the 50-share index is above the 21,800 mark.
Also read: Why has LIC share price soared over the last four months?
Stocks to buy on Monday – February 26
As for stocks to buy on Monday, Sumeet Bagadia recommended three stocks to buy on Monday: Dr. Reddy’s Laboratories, Mahindra & Mahindra (M&M) and Reliance Industries Limited or RIL.
1) Dr. Reddy’s Laboratories: Buy in $6442, target $6810, stop loss $6210.
Share price of Dr Reddy, which is currently listed on $6442.15 levels, demonstrates a solid technical perspective. The stock has a strong support zone near $6210, in close alignment with its 20-day exponential moving average (DEMA), signifying a solid foundation for a possible upward move. Trading above the short-term (20-day), medium-term (50-day), and long-term (200-day) EMAs further reinforces the positive trend, highlighting the stock’s sustained bullish momentum.
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A compelling development is the recent strong break above $6400 levels, indicating further strength and potential for further price appreciation. On the weekly charts, DRREDDY has consistently formed higher highs and higher lows over the past five weeks, emphasizing a strong and consistent uptrend.
The momentum indicator, the Relative Strength Index (RSI), currently at 70.22 levels, is in overbought territory, underscoring the stock’s strong bullish momentum. On the higher side, the stock has the potential to move towards $6810 levels, presenting an attractive target for investors.
Based on this analysis, it is recommended to buy Dr Reddy share price at the current market price (CMP) of $6442.15. Additionally, investors may consider adding to their positions on near dips. $6320, setting a stop loss at $6210 and targeting 6810 levels. This comprehensive strategy aligns with the positive technical indicators and the potential for further upside in Dr Reddy’s share price.
2) M&M’s: Buy in $1930, target $2050, stop loss $1850.
M&M’s share price, which is currently trading on $1930, shows a strong trend with consistent formation of higher highs and higher lows over the last 7 days, indicating inherent strength. The stock is supported by a solid base near $1850 levels, indicating a resistant base for possible bullish moves.
On the positive side, the stock has the potential to achieve $The 2050 levels, as suggested by the Fibonacci extension levels, reflect a positive outlook for possible price appreciation. In particular, the presence of strong volume on the charts underlines the interest of buyers, reinforcing the bullish sentiment.
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M&M’s favorable positioning above key moving averages, including the short-term (20-day), medium-term (50-day), and long-term (200-day) exponential moving averages (EMAs), further solidifies the positive technical setup . This alignment signifies a sustained bullish trend and affirms the overall strength of the stock.
In summary, M&M’s technical indicators collectively point towards a bullish scenario, with a clear uptrend, strong support levels and potential for further upside, supported by volume analysis and favorable EMA positioning.
Based on this analysis, it is recommended to buy M&M shares at the current market price (CMP) of 1930. Additionally, investors may consider adding to their positions in near dips. $1900, establishing a loss limit on $1850, and pointing $2050 levels. This comprehensive strategy aligns with positive technical indicators and the potential for further upside in M&M’s share price.
3) Reliance Industries Ltd or RIL: Buy in $2987, target $3180, stop loss $2884.
Reliance share price is currently trading at an all-time high of $2987, showing a consistent pattern of forming new highs and higher lows. This trend is supported by significant trading volume, suggesting the possibility of further bullish movement. The planned price targets are set at $3180, with substantial support seen nearby $2884 down.
Furthermore, NHPC is currently trading above key exponential moving averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs. This indicates strong bullish momentum, implying the probability of sustained bullish price action. The Relative Strength Index (RSI) is at 67.8, indicating an upward trajectory and confirming an increase in buying momentum.
To manage risk effectively, it is recommended to set a stop-loss (SL) on $2884 to protect the investment in the event of an unexpected market reversal. A prudent strategy involves considering buying opportunities on market declines at levels around $2920.
In summary, based on technical analysis and prevailing market conditions, the Reliance share price seems to present a promising buying opportunity for those targeting a $3180 price target. This recommendation is dependent on the implementation of prudent risk management measures.
Disclaimer: The opinions and recommendations above are those of individual analysts, experts and brokerage firms, not those of Mint. We advise investors to consult certified experts before making any investment decisions.
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