Initiate 'Buy on Dips' strategy; L&T a good buy for short term for target of Rs 1390

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26 Aug, 2025 12:21

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By Jaydeb DeyStewart & Mackertich Wealth Management Ltd.

The Nifty previous day ended 0.97 percent up at 10,211.80. Gap-up opening followed by range bound movement with positive bias led the Benchmark Index settle in green after a prolonged weekend.

Ending the session with a bullish Marubozu candle around 10,210 is a sign of strength. On contrary note, overnight global markets cues may interrupt this uptrend and drag down the Benchmark Index towards critical support placed around 10,150.

However, “buy-on-dips around critical supports” is the strategy to be followed at this juncture. Down side supports are placed around 10,150 and 10,100.

On the Nifty hourly chart; huge positive divergence in RSI made the buying on dips and helped the Index closing above 100 hourly EMA placed around 10,195. Also, inverse Head-and-Shoulder pattern formation is now clearly visible. Hence, “buy-on-dips around critical supports” is the strategy to be followed.

Nifty patterns on multiple time frames show, it continued oscillating on the positive side towards ending the session with a bullish body candle. Chart pattern suggests, Nifty pullback from the oversold zone pattern is still intact.

The Bank Nifty previous session ended 0.27 percent up at 24,328.50. It may remain stuck in the price band of 24,000 to 24,470.

Based on thorough technical study, the research firm has recommended Larsen & Toubro (L&T) which can give up to 5 percent return in the near short term:

Larsen & Toubro Ltd | Rating: Buy | Target: Rs 1390, stop loss: Rs 1290 | Return: 5%

The stock ended the previous session with a consolidation breakout. Closing above critical resistance of Rs 1320 with a bullish marabou candle brightens the possibility of next up move towards Rs 1390. Also, rising RSI coupled with +DI –DI bullish crossover makes the bull case even stronger.

Based on the above mentioned observations, the firm has recommended L&T as a strong buy on dips for the short-term upside target of Rs 1390.

Disclaimer: The author is Technical Analyst at Stewart & Mackertich Wealth Management Ltd. The views and ideas expressed above may have been suggested to the clients of Stewart & Mackertich Wealth Management Ltd. It is advised that investors/traders should consult with their Certified Experts before taking any investment decision.