After a sharp decline in the Indian stock market, triggered by a hawkish outlook from the US Federal Reserve on interest rate cuts and Foreign Institutional Investors (FIIs) pulling out, the market ended its four-week winning streak. Key indices saw significant losses, with the Nifty 50 index dropping by 1,181 points, falling from 23,768 to 23,587. Similarly, the BSE Sensex lost over 4,000 points, crashing from 82,133 to 78,041, while the Nifty Bank index dropped by 2,824 points, from 53,583 to 50,759.
The Nifty 50 index fell below its critical 200-day Exponential Moving Average (200-DEMA) support at 23,800, increasing concerns among market participants. As the index nears its recent swing low of 23,250, traders are watching closely to see whether this support will hold or if the market will dip further.
Expert View on Stock Market Movement
Sumeet Bagadia, Executive Director at Choice Broking, suggests that the market overall bias has weakened, especially with the Nifty 50 slipping below its 200-DEMA support. Bagadia cautioned investors to remain cautious, as the index could test the lower support at 23,250. If it breaks below this level, further downside could follow. On the other hand, a rebound from this support could see the Nifty 50 face resistance at the 23,800 level, making it a critical range to watch for a potential trend reversal.
Recommended Stocks for Next Week
Despite the overall market weakness, Bagadia highlighted three stocks that investors might consider buying:
- Titan Company
Buy at ₹3,356.25
Target: ₹3,555
Stop Loss: ₹3,222Titan stock is showing signs of recovery after a long decline. While still below its key moving averages, a rise above these levels could indicate the beginning of a turnaround. If the stock manages to close above the 20-day and 50-day EMA, a bullish trend could emerge, with a target of ₹3,555. A stop loss at ₹3,222 is recommended to manage potential risks.
- Petronet LNG
Buy at ₹336.45
Target: ₹355
Stop Loss: ₹323Petronet LNG has shown resilience, bouncing back from support levels near ₹320. If the stock sustains above ₹340, bullish momentum could drive it toward ₹355. With the RSI standing at 51.28, the stock is in a moderate uptrend. A stop loss of ₹323 is advised to mitigate risks.
- Dr. Reddy Laboratories
Buy at ₹1,343.65
Target: ₹1,425
Stop Loss: ₹1,295Dr. Reddy Laboratories has shown strong positive momentum, with the stock trading above its 20-day, 50-day, and 200-day EMAs. A breakout above ₹1,370 could push the stock higher toward ₹1,425. Investors are advised to use a stop loss at ₹1,295 to protect their investments.
As the Indian stock market navigates through a volatile phase, these three stocks — Titan, Petronet LNG, and Dr. Reddy Laboratories — offer potential opportunities for investors. With careful attention to key support and resistance levels, and by implementing stop losses to manage risk, investors can make strategic decisions during these uncertain times.
