Buy or sell: Sumeet Bagadia recommends three stocks to buy on Monday — 30 December 2024

Buy or sell stocks: The Indian stock market continued to trade sideways throughout the week as the Nifty 50 index failed to break above the 200-DEMA hurdle, which was placed at 23,850. The 50-stock index closed 82 points north at 23,832 on Friday; the BSE Sensex finished 259 points up at 78,732, while the Bank Nifty index ended 162 points higher at 51,333 on the last trade session of the truncated week.

Subdued movement continues in the Mid-cap and Small-cap indices, whereas the Nifty Mid-cap 100 Index fell by 0.26% while the Nifty Small-cap Index gained 0.15%. Declining shares outnumbered the advancing shares for the eighth day on the trot, where the advance-decline ratio stood at 0.96 on BSE. Amongst the sectoral indices, Nifty Pharma, Auto, and Healthcare gained the most, while Nifty Metal, PSU Banks, and OIL/GAS were significant losers.

Sumeet Bagadia’s stock picks for next week

Sumeet Bagadia, Executive Director at Choice Broking, believes that the overall Indian stock market sentiment is range-bound as the Nifty 50 index has failed to break above the 200-DEMA hurdle, which was placed at 23,850. The Choice Broking expert said the 50-stock index has made immediate support at 23,500, whereas the crucial support for the frontline index is placed at the 23,200 mark. He noted that the current range of the Nifty 50 index is 23,200 to 23,850, and a bullish or bearish trend can be assumed on the breakage of either side of the range. Bqagadia suggested investors look at those stocks that are looking strong on the technical chart.

Regarding buy or sell stocks next week, Sumeet Bagadia recommended buying these three shares: Can Fin Homes, Dr Reddy’s Laboratories, and Mahindra & Mahindra (M&M).

Buy or sell stocks for next week

1] Can Fin Homes: Buy at ₹750.55, target ₹810, stop loss ₹720.

Can Fin Homes share chart shows some signs of recovery, but it’s still in a downtrend. Currently priced around ₹750.55, The recent rise from the support levels at ₹716 follows a long decline, hinting that things could improve if more buyers continue to support the stock.

Can Fin Homes still trade below its major moving averages: the 20-day EMA, 50-day EMA, and 100-day EMA? Being below these levels usually signals a bearish trend, but if the stock closes above them, it might show the beginning of a turnaround. A close above the 20-day EMA would be a positive sign, and crossing the 50-day EMA would further strengthen this. However, the stock may struggle to go higher if it stays below these points.

The recent low of around ₹720 is a support level at which some buyers are stepping in. If Can Fin Homes’ share price falls below this support, it could continue its downtrend. But if it breaks above the resistance at the 20-day and 50-day EMAs, it might move toward ₹810, which would be a stronger recovery sign.

A suggested stop loss (SL) could be placed at ₹720 to limit downside risk, while the target is set at ₹810, aligning with the resistance level near the 50-day EMA.

2] Dr Reddy’s Laboratories: Buy at ₹1389.45, target ₹1500, stop loss ₹1340.

Dr Reddy’s Laboratories share price is currently trading at ₹1389.45, which indicates a sharp reversal from recent lows, driven by renewed buying momentum and robust volumes. The stock’s positive momentum is further confirmed by its positioning above the short-term (20-day), medium-term (50-day), and long-term (200-day) EMA levels.

However, Friday’s upside move of 2.43% made a high of ₹1398.25. This movement suggests sustained buying interest, with the stock potentially entering an uptrend. The stock’s higher high and higher low formation further emphasizes the underlying bullish trend. A significant breakthrough above the resistance at ₹1400, supported by robust volumes, underscores the stock’s strength, which also marks its all-time high. A breakout above this crucial resistance could set the stage for a rally towards the target of ₹1500 in the short term. Traders and investors who entered at lower levels are advised to safeguard their positions by trailing stop losses near ₹1340, aiming for the target of ₹1500 and beyond.

The momentum indicator, Relative Strength Index (RSI), is currently at 75 levels, indicating positive momentum in the stock. For those considering fresh investments, purchasing at the current market price (CMP) is a viable option, targeting ₹1500, with a stringent stop loss set at ₹1340 levels to manage risk effectively.

3] Mahindra & Mahindra or M&M: Buy at ₹3049.45, target ₹3300, stop loss ₹2900.

The M&M’s share price is currently trading around ₹3049.45, showing some consolidation after a recent downward movement. The stock has been moving in a range, trying to find stability before making its next move.

M&M share price has strong support at ₹2900 (near the 100-day Exponential Moving Average or EMA), and resistance around ₹3200. If the price breaks above ₹3200, it could lead to a new upward trend, pushing the stock towards ₹3300.

The stock has witnessed consistent trading volume, but it needs to break above the resistance level on a more substantial volume to confirm a sustainable uptrend. If the price is above the volume weighted average price (VWAP) of approximately ₹3030, a recovery can be anticipated in the coming sessions.

M&M share price is showing signs of recovery in the short term, especially if it can break above the ₹3200 level. Investors can look for buying opportunities on dips while keeping an eye on Stop-Loss at ₹2900 and target of ₹3300 levels for further movement.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.