Stocks to buy or sell: Dharmesh Shah of ICICI Sec suggests buying Larsen & Toubro shares tomorrow

Mint

4 hours ago

Stock market today: The Indian stock market experienced a significant upswing on Friday, as benchmark indices finished notably higher, driven by widespread purchasing across various sectors and strong investor confidence.
The Sensex rose by 1,046.30 points, closing at 82,408.17, while the Nifty 50 increased by 319.15 points, finishing the day at 25,112.40. Among the constituents of the Nifty 50, 44 stocks closed in positive territory, with only 6 in decline, highlighting the overall strength of the market.
Dharmesh Shah, Vice President at ICICI Securities, said Nifty 50 looks poised for a breakout from five weeks of consolidation (25,200-24,500) that would open the door for 25,500 in coming weeks.
Shah has recommended one stock to buy for short-term. Here's what he expects from Indian stock market next week, along with his stock recommendation.
Equity benchmark gained ~1.5% and settled the session at 25,112, outpacing Midcap index (-0.5%), and also fared well against developed markets. Sectorally, rate sensitives regained momentum led by Financials, auto. Meanwhile, pharma underwent profit booking after announcement of possible tariff by US. The weekly price action formed a bull candle confined within last week's trading range, indicating prolonged consolidation.
Over past five weeks Nifty 50 has been consolidating in 700 points range wherein it managed to defend the 24500 on multiple occasions despite escalated geopolitical issues. Further, index heavy weights regained upward momentum as RBI eased project financing norms that boosted market sentiment.
We believe, Nifty 50 has formed a higher bottom above 50-day EMA (24,480) and looks poised for a breakout from five weeks of consolidation (25,200-24,500) that would open the door for 25,500 in coming weeks. Meanwhile, 24,500 would continue to as key support zone. In the process, bouts of volatility owing to geopolitical concern as well as monthly expiry week cannot be ruled out.
Hence, any dip from hereon should be capitalised as incremental buying opportunity in a quality stock.
Past four decades, six major geopolitical escalations suggest that index forms a major bottom once the anxiety around the geopolitical event settles down. And investing in such a panic like scenarios with a long-term mind set has been rewarding with double digit returns in subsequent three months. Hence, we advise dips should be capitalised to build quality portfolios from medium to long term perspective.
The index is witnessing shallow retracement as over past five weeks it has merely corrected 3% of preceding six week's rally (15%), indicating robust price structure that has helped index to cool off overbought conditions and set the stage for next leg of up move.
On the broader market front, The Nifty midcap index has taken a breather after 28% rally off April low and now approaching lower band of rising channel that coincided with 50 days EMA. In addition to that, 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. Thereby we expect index to find its feet around 50 days EMA and stage a gradual recovery
1. Development of geopolitical issues
2. Brent crude is hovering at immediate hurdle of $78. Lack of follow through strength would result into consolidation in 78-66 range
3. Further weakness in US Dollar index
4. Bilateral Trade Agreement between India and US
Dharmesh Shah of ICICI Securities recommends buying Larsen & Toubro shares this week.
Buy Larsen & Toubro shares (L&T) in the range of ₹ 3,420-3,660. He has L&T share price target of ₹ 3,928 with a stop loss of ₹ 3,264.
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 20/06/2025 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.