Buy or sell stocks: The key benchmark indices of the Indian stock market witnessed sharp selling last week. The Nifty 50 index ended 2.37% lower, while the BSE Sensex was down by 2185 points. Among sectors, the Defence index gained 1.30%, whereas India Tourism, Oil & Gas, and Energy indices shed over 5%. NSE cash market turnover was lower by 2% compared to the previous session.
The pain was even more pronounced in the broader space where the Nifty Mid-cap 100 Index slipped 0.79% while the Nifty Small-cap 100 plunged 1.81%. This led to a sharp deterioration in market breadth, as decliners outpaced advancers. The BSE advance-decline ratio stood at 0.34, signalling a continuation of selling across mid and small-cap stocks.
Stock market outlook
Sumeet Bagadia, Executive Director at Choice Broking, believes the Indian stock market sentiment has turned nervous as the Nifty 50 index further corrected after breaking below the 50-DEMA support of 25,900 and came close to the 20-DEMA support placed at 25,530.
Speaking on the outlook of the Indian stock market, Sumeet Bagadia said, “The Indian stock market sentiment has turned nervous as the Nifty 50 index went further down and came close to its 20-DEMA support placed at 25,530. On Thursday, the 50-stock index had broken below the 50-day EMA, a crucial support level of 25,900. For strengthening the bulls’ conviction, the key benchmark index needs to close above 25,900. On the lower side, the situation may worsen if the 25,500 support is broken.”
Stocks to buy next week
Sumeet Bagadia recommended buying stocks that look strong on the technical chart and suggested these three shares: Eternal, Asian Paints, and BEL.
1] Eternal: Buy at ₹284.35, Target ₹310, Stop Loss ₹275.
Eternal share price is currently in a corrective consolidation phase following a strong prior uptrend. After marking a swing high near the ₹360 zone, the stock has undergone a healthy retracement and is now stabilising on the daily chart. Price action shows ETERNAL trading near the 200 EMA (~ ₹286), which is acting as a critical long-term demand and trend-defining support. The recent candles indicate buying interest emerging from this zone, suggesting that downside momentum is slowing.
The 20 EMA and 50 EMA are below the price but still sloping downward, reflecting short-term weakness after the correction. However, the gap between price and these averages has narrowed, hinting at a potential base formation. A sustained move above the 50 EMA (~295) would be the first sign of renewed bullish momentum. The 100 EMA (~298) is acting as an immediate overhead resistance. Acceptance above this level, followed by a reclaim of the 20 & 50 EMA cluster, would signal a trend resumption toward the 310-resistance zone. Volume has tapered off during the decline, indicating a lack of aggressive selling pressure. This reduction in volume near the 200 EMA supports the view of accumulation rather than distribution.
Structurally, the ₹275 zone is a key support region. As long as ETERNAL holds above this area, the broader uptrend remains intact. A decisive breakdown below the 200 EMA would negate this structure and could open further downside.
Overall, the stock is at a make-or-break level, with signs of stabilisation favouring a potential bullish reversal if key EMAs are reclaimed.
2] Asian Paints: Buy at ₹2825, Target ₹3000, Stop Loss ₹2725.
Asian Paints’ share is displaying a strong trend reversal and continuation setup on the daily chart after a prolonged consolidation phase. Price action has shifted decisively from a lower-high structure to a higher-high, higher-low formation, indicating a transition from bearish to bullish momentum.
The stock has delivered a sharp breakout above the 200 EMA (~ ₹2590), followed by strong bullish follow-through. The price is now comfortably trading above the 20 and 50 EMA, with both averages turning upward, confirming the strengthening of short-term momentum. The 100 EMA has also been reclaimed, reinforcing the medium-term trend reversal.
Volume expanded notably during the upside breakout, signalling institutional participation and demand-driven buying. Subsequent pullbacks have been accompanied by relatively lower volumes, suggesting healthy consolidation rather than distribution.
Structurally, the ₹2725 zone now acts as a key demand and retest area. As long as Asian Paints holds above this region, the bullish structure remains intact and favours continuation toward the ₹2900 to ₹3000 resistance zone. A sustained move above recent highs would further open the path for trend expansion, while any dip toward the mentioned support is likely to attract buying interest.
3] BEL: Buy at ₹418, Target ₹450, Stop Loss ₹405.
The BEL share price is exhibiting a bullish trend continuation setup on the daily chart after a strong prior uptrend and healthy consolidation. Following the rally from the ₹260 zone, the stock underwent a time-wise correction and has now resumed its upward structure, indicating sustained bullish momentum.
Price is currently trading above the 20 and 50 EMA, with both averages flattening and starting to turn upward, reflecting renewed short-term strength. The 100 EMA continues to act as a dynamic support during pullbacks, while the 200 EMA remains well below the price, confirming the strength of the broader uptrend.
Volume remained elevated during the impulsive advance, while the subsequent consolidation phase saw relatively lower volumes, signalling healthy profit booking rather than distribution. The recent breakout from the consolidation range is supported by improving volume, suggesting fresh buying interest.
Structurally, the ₹405 zone now acts as a strong demand area, aligned with the 20- and 50-day EMA clusters. As long as BEL holds above this support, the bullish structure remains intact and favours continuation toward the ₹430 to ₹450 resistance zone. A decisive move above recent swing highs would further strengthen the bullish bias.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
