Stock Market Hits 12-Day High! Sumeet Bagadia’s Top Picks: Buy Dr. Reddy’s, Godrej, & Pidilite for Monday – Sept 2

The Indian stock market ended higher for the twelfth straight session last Friday, fueled by strong global sentiments. The Nifty 50 index achieved its best winning streak since its launch in 1996 by rising for the 12th day in a row. The 50-stock index finished 83 points higher, closing at the 25,235 mark. Meanwhile, the BSE Sensex shot up by 231 points to close at 82,365, and the Nifty Bank index ended 198 points higher, closing at 51,351.

Due to index rebalancing volumes, cash market volumes on the NSE were around 71% higher than the previous day. The broad market indices showed more strength than the Nifty, as the advance-decline ratio improved to 1.39:1. This indicates that more stocks advanced compared to those that declined, showing overall market strength.

Sumeet Bagadia, Executive Director at Choice Broking, shared his positive outlook on the Indian stock market. He highlighted that the Nifty 50 index has managed to sustain above the 25,000 mark, a significant support level. Bagadia believes that the frontline index could potentially rise to 25,550 to 25,600, provided it breaches the minor resistance level placed at 25,300. He emphasized that the Nifty has crucial support at 24,900, with immediate support at the 24,100 mark, meaning that these levels could act as strong buying zones if the market were to dip.

Bagadia also provided his recommendations on three stocks to consider buying on Monday:

1. Dr. Reddy’s Laboratories: He recommends buying this stock at ₹7031.35, with a target price of ₹7410 and a stop loss at ₹6780. Currently, Dr. Reddy’s Laboratories is trading above its short-term (20-day EMA), medium-term (50-day EMA), and long-term (200-day EMA) exponential moving averages, indicating strong bullish momentum. The recent price action shows a consistent upward trend, with minor resistance around the ₹7,065 mark. If the stock breaks above this level, especially with increased trading volumes, it could rally further towards the ₹7,410 target.
2. Godrej Consumer Products: Bagadia suggests buying this stock at ₹1481.20, aiming for a target of ₹1600, with a stop loss set at ₹1425. The stock has shown a notable recovery after rebounding from a support level of ₹1425, which is just below its 20-day EMA and close to its 50-day EMA levels. Currently, it is trading above all the essential Exponential Moving Averages (EMA), indicating strength. Additionally, the Relative Strength Index (RSI) is around 59.32, suggesting a balanced market sentiment that could be poised for an upward move. If the stock can close above the minor resistance level at ₹1520, it may advance further towards the ₹1600 target.
3. Pidilite Industries: He recommends purchasing Pidilite Industries at ₹3123.30, with a target price of ₹3280 and a stop loss at ₹3050. Pidilite shares have recently shown a strong recovery, bouncing back from the support level of ₹3,050. This recovery has enabled the stock to break through the resistance level of ₹3,100, which aligns with its short-term (20-day EMA) and medium-term (50-day EMA) moving averages. This crossover above critical EMAs suggests that the stock is gaining strength and could continue its upward trend. The momentum indicator RSI, which is currently at 53.37, also supports this bullish outlook. If Pidilite manages to close above the minor resistance at ₹3,140, it could potentially move towards the target of ₹3,280. Investors are advised to consider accumulating the stock on dips while closely monitoring the ₹3,050 support level for risk management.

Based on this analysis, Sumeet Bagadia believes these three stocks—Dr. Reddy’s Laboratories, Godrej Consumer Products, and Pidilite Industries—present good buying opportunities for the upcoming trading week.