Buy or sell stocks: After showing an excellent upside recovery from the lows on Thursday, the Indian stock market shifted into a range-bound action for the whole session on Friday and closed in the red territory. The Nifty 50 index went off 4 points and closed at the 22,212 level, the BSE Sensex slipped 15 points and ended at the 73,142 mark while the Bank Nifty index lost 108 points and finished at 46,811 level.

After opening on a positive note, the Nifty 50 index was not able to sustain the opening gains and slipped into minor weakness amidst a range movement in the early part and later this sideways movement continued for the whole 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, Executive Director at Choice Broking believes that the Nifty 50 index went past the crucial 22,000 level decisively in the week gone by. The Choice Broking expert went on to add that overall Indian stock market sentiment is positive. Bagadia advised a ‘buy on dips’ strategy till the 50-stock index is above the 21,800 mark.

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Stocks to buy on Monday — February 26

On stocks to buy on Monday, Sumeet Bagadia recommended three shares to buy on Monday — Dr. Reddy’s Laboratories, Mahindra & Mahindra (M&M), and Reliance Industries Limited or RIL.

1] Dr Reddy’s Laboratories: Buy at ₹6442, target ₹6810, stop loss ₹6210.

Dr Reddy share price, currently trading at ₹6442.15 levels, demonstrates a robust technical outlook. 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 potential upward movement. 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 breakout above ₹6400 levels, indicating heightened strength and potential for further price appreciation. On weekly charts, DRREDDY has consistently formed higher highs and higher lows for the past five weeks, emphasizing a strong and consistent uptrend.

The momentum indicator, Relative Strength Index (RSI), currently at 70.22 levels, is in the overbought territory, underlining the stock’s strong upward 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 dips near ₹6320, setting a stop loss at ₹6210, and targeting 6810 levels. This comprehensive strategy aligns with the positive technical indicators and potential for further upside in Dr Reddy share price.

2] M&M: Buy at ₹1930, target ₹2050, stop loss ₹1850.

M&M share price, presently trading at ₹1930 levels, displays a robust trend with a consistent formation of higher highs and higher lows over the last 7 days, signaling inherent strength. The stock is supported by a strong foundation near ₹1850 levels, indicating a resilient base for potential upward movements.

On the upside, the stock has the potential to reach ₹2050 levels, as suggested by Fibonacci Extension levels, reflecting a positive outlook for potential price appreciation. Notably, the presence of strong volume on the charts underlines buyer interest, reinforcing the bullish sentiment.

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M&M’s favourable 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 uptrend and affirms the stock’s overall strength.

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 favourable 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 on dips near ₹1900, setting a stop loss at ₹1850, and targeting ₹2050 levels. This comprehensive strategy aligns with the positive technical indicators and potential for further upside in M&M share price.

3] Reliance Industries Ltd or RIL: Buy at ₹2987, target ₹3180, stop loss ₹2884.

Reliance share price is currently trading at an all-time high of ₹2987, exhibiting a consistent pattern of forming new higher highs and higher lows. This trend is supported by significant trading volume, suggesting the potential for further upward movement. Anticipated price targets are set at ₹3180, with substantial support observed near ₹2884 on the downside.

Furthermore, NHPC is presently trading above key Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs. This indicates a robust bullish momentum, implying the likelihood of sustained upward price action. The Relative Strength Index (RSI) is at 67.8, signifying an upward trajectory and confirming an increase in buying momentum.

To manage risk effectively, it is recommended to set a stop-loss (SL) at ₹2884 to protect the investment in the event of an unexpected market reversal. A prudent strategy involves considering buying opportunities on market dips at levels around ₹2920.

In summary, based on technical analysis and prevailing market conditions, Reliance share price appears to present a promising buying opportunity for those targeting a ₹3180 price objective. This recommendation is contingent upon the implementation of prudent risk management measures.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.