Sumeet Bagadia Recommends Three Stocks to Buy Despite Market Decline

The Indian stock market faced intense selling pressure last week, with key benchmark indices witnessing sharp declines across multiple sectors. The market correction has prompted technical analysts to identify potential buying opportunities amid the broader weakness.

Market Performance Overview

The benchmark indices experienced significant downward pressure during the week. The Nifty 50 index closed 2.37% lower, while the BSE Sensex declined by 2,185 points. Sector-wise performance showed mixed results, with the Defence index managing a 1.30% gain, contrasting sharply with losses in other sectors.

The broader market witnessed even more pronounced weakness. The Nifty Mid-cap 100 Index slipped 0.79%, while the Nifty Small-cap 100 plunged 1.81%. This led to deteriorating market breadth, with the BSE advance-decline ratio standing at 0.34, indicating widespread selling across mid and small-cap stocks.

Technical Market Outlook

Sumeet Bagadia, Executive Director at Choice Broking, observes that market sentiment has turned nervous following recent technical developments. The Nifty 50 index broke below the crucial 50-DEMA support level of 25,900 and approached the 20-DEMA support placed at 25,530.

Bagadia explains the current technical scenario: "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. 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."

Stock Recommendations

Despite the challenging market environment, Bagadia has identified three stocks with strong technical setups for potential buying opportunities.

Eternal Limited

Eternal's share price is currently in a corrective consolidation phase following a strong prior uptrend. After reaching a swing high near ₹360.00, the stock has undergone healthy retracement and is now stabilising near the 200 EMA support at approximately ₹286.00. The recent price action indicates buying interest emerging from this critical long-term demand zone, with volume tapering off during the decline, suggesting reduced selling pressure.

Asian Paints Limited

Asian Paints displays a strong trend reversal setup after a prolonged consolidation phase. The stock has delivered a sharp breakout above the 200 EMA at approximately ₹2,590.00, with strong bullish follow-through. Volume expansion during the upside breakout signals institutional participation and demand-driven buying, while subsequent pullbacks have been accompanied by relatively lower volumes.

Bharat Electronics Limited (BEL)

BEL exhibits a bullish trend continuation setup after a strong prior uptrend and healthy consolidation. Following the rally from the ₹260.00 zone, the stock underwent time-wise correction and has now resumed its upward structure. The price is trading above the 20 and 50 EMA, with both averages beginning to turn upward, reflecting renewed short-term strength.

Risk Considerations

All recommendations come with defined stop-loss levels to manage downside risk. Investors should note that these views represent technical analysis opinions and should conduct their own research before making investment decisions. The current market environment requires careful position sizing and risk management given the nervous sentiment and key technical levels being tested.