Buy or sell stocks: Following strong global market sentiments on US Fed rate cut optimism and India-US trade deal, the Indian stock market extended its uptrend for the eighth straight session on Friday. The Nifty 50 index regained the psychological 25,000 levels and ended at 25,114. The BSE Sensex finished nearly 82,000, while the Bank Nifty index was 139 points higher at 54,809. The broader market maintained momentum with Nifty Midcap100 and Smallcap100 up 0.3% and 0.6%, respectively.
Sectorally, financial services and metals advanced 1% each, while the IT index posted modest gains, led by Infosys shares, which rose after approving its largest-ever buyback worth ₹18,000 crore. Defence stocks surged, lifting the Nifty India Defence index over 4% on fresh order wins that spurred strong buying interest.
Stock market outlook
Sumeet Bagadia, Executive Director at Choice Broking, believes the Indian stock market is slowly gaining strength, with bias and sentiment improving as the Nifty 50 index nears the important hurdle of the 25,250 to 25,300 zone. The Choice Broking expert said the Nifty 50 index needs to break above 25,300 decisively to set a fresh positive tone for bulls. On breaking above 25,300, the key benchmark index may try to touch the 25,800 levels.
Speaking on the outlook of the Indian stock market next week, Sumeet Bagadia said, “The Indian stock market bias has gained strength as the Nifty 50 index gained further after closing above 25,000 levels. The index is facing a hurdle at 25,300. The first few hours of the Monday session would be crucial. If the 50-stock index breaks above this resistance on a closing basis, we can expect the key index to touch 25,800 levels. So, one should look at those stocks that look strong on the technical chart.”
Sumeet Bagadia’s recommended stocks
Sumeet Bagadia recommended three stocks to buy on Monday: Tata Motors, Reliance Industries Ltd, and Shriram Finance.
1] Tata Motors: Buy at ₹715.25, Target ₹790, Stop Loss ₹680.
Tata Motors’ share is trading at ₹715.25 and has formed a bullish Inverted Head and Shoulder pattern, with a successful retest at the trendline. Tata Motors’ share price faces immediate resistance at the 200-DEMA, placed around the ₹719 to ₹720 levels. The consistent rise in trading volume further supports the bullish sentiment and indicates growing investor interest.
Tata Motors’ share has previously taken strong support at ₹680, which aligns with a prior swing high, reinforcing it as a key demand zone. On the technical front, Tata Motors is forming a pattern of higher highs and higher lows, a classic sign of an ongoing uptrend. The RSI is currently at 61.53, indicating strong bullish momentum and suggesting the potential for an upside breakout if the stock sustains above the 200 EMA resistance.
In conclusion, if Tata Motors’ share price manages to break and sustain above the ₹720 level, it could trigger a strong upward move towards the target of ₹790. The bullish setup remains valid if the price exceeds the key support level of ₹680. Traders should ensure proper risk management with a strict stop loss at ₹680 to safeguard against any unexpected downside.
2] Reliance Industries Limited: Buy at ₹1395, Target ₹1515, Stop Loss ₹1335.
Reliance’s share price is currently trading at ₹1395. It has recently broken out of a falling parallel channel pattern, indicating a potential trend reversal. The breakout is backed by increasing volume, which reflects rising investor participation and strengthens the bullish outlook. Additionally, the stock is trading above its 200-DEMA, confirming positive momentum over the long term.
Reliance’s share price has taken solid support at ₹1365, which aligns with a previous swing high, marking it as a significant demand zone. On the technical side, the Reliance share price shows a structure of higher highs and higher lows, a typical signal of an emerging uptrend. The RSI indicator is currently at 51.90 and has shown a recent bullish crossover, pointing toward renewed buying strength and further upside potential.
In conclusion, if the Reliance share price sustains above the ₹1400 level, it may trigger a strong upward move toward the target of ₹1515. Traders are advised to implement strict risk management with a stop loss of ₹1335 to protect against any unexpected downside movement.
3] Shriram Finance: Buy at ₹632.85, Target ₹700, Stop Loss ₹600.
Shriram Finance’s share is currently trading at ₹632.85. It has recently witnessed a retracement towards its crucial support zones, from where it has shown a strong bounce, indicating renewed buying interest. During the daily timeframe, the stock had been moving within a falling trend line formation and had now given a decisive breakout, signalling a potential trend reversal.
Adding to the bullish outlook, Shriram Finance’s share price has successfully crossed above all its key moving averages, which further confirms the strength of the ongoing momentum. The RSI is currently at 60.06, reflecting a strong uptrend and suggesting that the stock still has room for further upside.
In conclusion, the technical structure indicates that Shriram Finance shares could continue upward movement from current levels. To manage risk effectively, traders can consider initiating fresh long positions around ₹632.85, with a strict stop loss placed at ₹600. On the upside, the stock has the potential to rally towards the target of ₹700 if the momentum sustains.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
