Stocks to buy or sell: Dharmesh Shah of ICICI Sec suggests buying ABB India, Godrej Properties shares tomorrow
Stock market news: Equity benchmark indices Sensex and Nifty 50 fell by nearly 1% on Friday, influenced by weak global markets and a surge in Brent crude oil prices following Israel's assault on Iran's capital, which dampened investor sentiment. Experiencing a decline for the second consecutive day, the 30-share BSE Sensex plummeted by 573.38 points or 0.70%, closing at 81,118.60. The Nifty 50 experienced a drop of 169.60 points or 0.68%, ending at 24,718.60.
In terms of weekly performance, the BSE benchmark decreased by 1,070.39 points or 1.30%, while the Nifty 50 fell by 284.45 points or 1.13%.
Investors were hesitant to engage with riskier assets due to concerns over a potential full-scale war between Israel and Iran, coupled with outflows from foreign funds.
On the technical front, Dharmesh Shah, Vice President at ICICI Securities, expects Nifty 50 to hold 24,500 on a closing basis.
Shah has recommended two stocks to buy for short-term. Here's what he expects from Indian stock market next week, along with his stock recommendation.
Equity benchmark pared early week gains tracking subdued global cues owing to Israel's military strike on Iran. Consequently, Nifty 50 settled at 24,718, down 1.1%. Mirroring the benchmark move, Nifty midcap and small cap snapped 4 weeks winning streak, down 1.2%. Sectorally, profit booking was observed in recently rallied rate sensitives like, realty, financials and auto while IT, Pharma regained lost ground.
The weekly price action formed a bear candle while sustaining above key support zone of 24,500, indicating extended breather. Brent crude oil jumped 18% during the week ($78) tracking escalated geopolitical tensions in the oil-rich Middle East. The risk-off sentiment fueled the momentum in safe heaven gold, up 3.5% at $3440.
Going ahead, we expect volatility to remain elevated tracking geopolitical worries. Hence, development of geopolitical concern coupled with US Fed policy would have major bearing on the market which would dictate further course of action. Further, it is important to note that despite elevated volatility Nifty 50 managed to hold key support threshold of 24,500 and staged a rebound. Thereby, in the coming week, holding 24,500 on a closing basis would highlight strength and open the door for further pullback wherein immediate resistance is placed at 25,200.
In the last four decades there have seen six major geopolitical escalations. On each occasion it formed major bottom once anxiety around the event settled down. Investing in such panic reactions with long term mind set has been rewarding as index has witnessed double digit returns in subsequent three months. In the current scenario, post the kneejerk reaction, we believe market would stabilise. Hence, we advise dips should be capitalised to build quality portfolios from medium to long term perspective.
Structurally, the elongation of rallies followed by shallow correction is a perfect recipe of bull market. In current scenario, over past 21 sessions index has retraced merely 23.6% of preceding 25 sessions 16% up move. Slower pace of retracement indicating robust price structure that bodes well for next leg of up move.
On the broader market front, Nifty midcap is undergoing healthy retracement after 28% rally which should be used as buying opportunity based on following observations:
a) Since April low, Midcap index has not corrected >6% while on the weekly chart it has not closed below its previous week's low. In current scenario, despite ongoing volatility, midcap index has been maintaining the same rhythm.
b) Further, the ratio chart of Nifty 500/Nifty 100 has been inching upward that clearly indicates relative outperformance.
c) Improving market breadth as currently 55% of stock are trading above 200 days SMA compared to last month reading of 30%.
Key monitorable which would provide cushion to the ongoing up move:
a) Development of geopolitical concern
c) Brent crude is poised at immediate hurdle of $78. Lack of follow through strength would result into consolidation in 78-66 levels
d) Despite current decline, Index VIX is trading below immediate hurdle of 16
e) Further weakness in US Dollar index
f) Bilateral Trade Agreement between India and US
The key support threshold of 24,500 for the Nifty 50 is based on lower band of past four weeks consolidation coincided with 50% retracement of recent rally (23,935-25,222) and Friday's panic low is placed at 24,473.
Dharmesh Shah of ICICI Securities recommends buying ABB India, and Godrej Properties shares this week.
1. Buy ABB India shares in the range of ₹ 5,950-6,130. He has ABB India share price target of ₹ 6,860 with a stop loss of ₹ 5,648.
2. Buy Godrej Properties shares in the range of ₹ 2,350-2,470. He has Godrej Properties share price target of ₹ 2,748 with a stop loss of ₹ 2,218.
Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 13/06/2025 or have no other financial interest and do not have any material conflict of interest.
The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
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