Indian equity benchmarks extended their losing streak for the third consecutive session on Wednesday, January 7, closing marginally lower amid mixed signals from global markets. The benchmark Sensex declined by 102 points, or 0.12%, to settle at 84,961.14. The broader Nifty 50 index also slipped, ending the day at 26,140.75, down 38 points or 0.14%.
In a contrasting trend, mid-cap and small-cap stocks showed resilience. The BSE Midcap index advanced by 0.47%, while the BSE Smallcap index edged up by 0.12%, indicating selective buying interest beyond the heavyweight segments.
Market Outlook: Consolidation Phase Continues
Analysts observed that the Nifty 50's flat close near the 26,140 mark reflects a phase of indecision following its recent upward movement. The index is hovering close to its short-term moving averages, suggesting a pause in momentum. However, significant selling pressure appears limited as key support levels are being defended.
Sumeet Bagadia, Executive Director at Choice Broking, provided his technical perspective. He noted that on the hourly chart, the Nifty is consolidating within a narrow band. The index is facing repeated rejection near the 26,200–26,250 zone while finding buying interest around 26,000–26,050. The 200-hour exponential moving average (EMA) near 26,040 is acting as a strong foundation.
"Immediate resistance is placed at 26,200–26,250, while 26,000–26,050 remains a crucial support zone," Bagadia stated. He added that the near-term bias remains cautious yet stable, with the consolidation phase likely to persist.
Bank Nifty in a Corrective Phase
The Bank Nifty index, trading around the 59,950–60,000 range, is also undergoing consolidation after a sharp rally. Bagadia explained that the daily chart indicates a mild corrective phase within a downward-sloping channel, which points towards short-term profit booking rather than a full trend reversal.
The broader structure remains positive as the index continues to trade above key medium-term averages. On the hourly chart, the 20-day EMA near 60,000 serves as immediate resistance, while support is seen at the 50-day EMA around 59,825, followed by the 59,600 level. A hold above 59,600 is crucial for maintaining the current structure, and a breakout above the 60,200–60,300 resistance zone could reignite upward momentum.
Five Breakout Stock Picks for Traders
In the current market environment, Sumeet Bagadia has identified five stocks showing breakout patterns that traders could consider. Breakout stocks are those that surpass their established support or resistance levels, often signaling the start of a significant price move.
Here are the five recommended breakout stocks to buy:
- Godrej Industries (GODREJIND): The stock is trading near ₹1,054.20, showing early reversal signs after finding support at its 20-day EMA. A bullish candle and a break above a falling trendline suggest renewed buying interest. It trades above its 20 and 50-day EMAs. Traders can consider buying with a target of ₹1,160 and a stop loss at ₹1,000.
- Cyient (CYIENT): Priced around ₹1,176.90, Cyient has broken out of a falling trendline with healthy volume support. The RSI at 59.02 is trending upward. Support is visible near ₹1,150. The suggested strategy is to buy with a target of ₹1,285 and a stop loss at ₹1,125.
- Delhivery (DELHIVERY): Trading at ₹422.25, the stock has broken out of a sideways range and closed strongly above its 200-day EMA, indicating improving momentum. The RSI at 58.28 supports a bullish view. The recommendation is to buy with a target of ₹460 and a stop loss at ₹400.
- Hyundai Motor India (HYUNDAI): At ₹2,362, the stock has broken out of a descending triangle pattern, signaling a bullish reversal. It trades above all key EMAs (20, 50, 100, 200). The RSI at 57.62 is rising. Traders can buy with a target of ₹2,600 and a stop loss at ₹2,245.
- Kalyan Jewellers India (KALYANKJIL): The stock, around ₹520.75, has rebounded strongly from support near ₹460. It has closed decisively above its key EMAs and a previous swing high. The RSI at 67.50 shows rising momentum. The advice is to buy with a target of ₹570 and a stop loss at ₹494.
Disclaimer: This information is for educational purposes only. The views and recommendations are those of the individual analyst and not of the publication. Investors are strongly advised to consult with certified financial experts before making any investment decisions.
