The Indian stock market witnessed a sharp and painful correction in the week ending January 9, erasing the optimism that marked the beginning of the new year. Rising fears over potential US tariff measures, persistent selling by foreign investors, and heightened geopolitical tensions combined to trigger a broad-based sell-off.
A Week of Heavy Losses for Market Benchmarks
The benchmark indices suffered deep cuts. The S&P BSE Sensex plummeted by 2,186 points, or 2.5%, while the Nifty 50 mirrored the decline, also falling 2.5% over the week. This downturn marked a reversal from the record highs seen at the start of January, with the Nifty closing lower for five consecutive sessions.
Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, attributed the fall to a confluence of negative factors. "This downturn was fueled by renewed apprehensions regarding potential US tariff measures, ongoing outflows from foreign institutional investors (FIIs), and escalating global uncertainties," Patel noted. He added that profit-taking in major stocks further accelerated the selling pressure.
Technical Outlook: Key Support and Resistance Levels
From a technical perspective, the damage was significant. The Nifty broke below crucial support levels, ending the week in the 25,700–25,900 range. Patel highlighted that the index's failure to break out higher and its subsequent sharp reversal indicated exhaustion at elevated levels.
"The index has retraced towards a key support point near the weekly low of approximately 25,600, which acts as an immediate benchmark," Patel explained. He warned that a decisive breakdown below this level could extend the decline towards 25,400 in the near term.
However, there is a silver lining. Patel pointed out that while momentum indicators remain weak, the index is approaching short-term oversold conditions, which could set the stage for a technical rebound. Any recovery, though, is likely to face stiff resistance in the 25,800–26,000 range. "Consequently, the current scenario necessitates a cautious and selective strategy," he advised.
Expert's Short-Term Stock Recommendations
Amid this volatile backdrop, Jigar S. Patel has identified three stocks that present a buying opportunity for a horizon of one to two weeks, based on their robust technical structures.
1. ICICI Bank
Previous Close: ₹1,404.30
Buying Zone: ₹1,405–1,390
Target Price: ₹1,465
Stop Loss: ₹1,365
Patel observed that ICICI Bank's share price has delivered a decisive breakout above its key monthly and weekly pivot resistance levels, backed by a strong surge in volumes. The stock has also crossed above a long-standing falling trendline, confirming a shift from consolidation to an upward trend. Momentum indicators like MACD and RSI support this bullish view.
2. Endurance Technologies
Previous Close: ₹2,622
Buying Zone: ₹2,630–2,600
Target Price: ₹2,850
Stop Loss: ₹2,500
Endurance Technologies is showing signs of a medium-term trend reversal, according to Patel. The stock has formed a strong base near its 200-day exponential moving average and closed above critical weekly indicators. A bullish divergence on the MACD and the RSI holding above 50 suggest that buying momentum is building.
3. JSW Energy
Previous Close: ₹490.25
Buying Zone: ₹490–480
Target Price: ₹535
Stop Loss: ₹460
Patel highlighted that JSW Energy has confirmed a bullish breakout from an inverse head and shoulders pattern, validated by high trading volumes. The current pullback is on low volume, indicating weak selling pressure. The stock's weekly pivot support aligns with the pattern's neckline, strengthening the case for a fresh upward move.
Disclaimer: This analysis is for educational purposes only. The views and recommendations are those of the analyst. Investors are advised to consult certified experts before making any investment decisions, as market conditions are dynamic and individual circumstances vary.
