The Indian equity benchmarks concluded Monday's trading session in negative territory, succumbing to profit-taking in heavyweight stocks. This decline occurred despite generally positive signals from global markets, as investors turned cautious following heightened geopolitical tensions. The trigger was a US military strike in Venezuela leading to the capture of President Nicolas Maduro and his wife.
Market Performance and Key Levels
The S&P BSE Sensex dropped 322 points, or 0.38%, to finish at 85,439.62. Meanwhile, the NSE Nifty 50 index slipped 78 points, or 0.30%, settling at 26,250.30. In a contrasting trend, broader market indices showed resilience. The BSE Midcap index inched up by 0.05%, and the Smallcap index gained 0.07%.
The Nifty 50 started the day on a strong footing, even hitting a fresh record high of 26,373. However, it could not maintain these elevated levels and witnessed selling pressure, sliding to an intraday low of 26,210.
Expert Technical Analysis: Nifty and Bank Nifty
Sumeet Bagadia, Executive Director at Choice Broking, provided his outlook on the indices. He noted that the Nifty briefly broke below the crucial support level of 26,300 and confirmed a breakdown, closing at 26,244, which reinforces a short-term bearish bias. Immediate resistance is now placed in the 26,400–26,450 zone, while vital support lies between 26,200 and 26,150.
The daily Relative Strength Index (RSI) is at 58.09 and is trending lower, indicating a loss of bullish momentum. Market volatility increased, with the India VIX index jumping 6.06% to 10.02. Derivatives data pointed to heavy call writing at the 26,300 strike, making it a critical pivot level. Bagadia suggested that as long as the index holds above 26,200, a selective buy-on-dips strategy remains favorable, with strict stop-losses at 26,150.
The Bank Nifty mirrored this pattern, opening strong and achieving a new all-time high of 60,437 before retreating below the psychological 60,000 mark to an intraday low of 59,859.
Bagadia commented that the Bank Nifty's recovery to close at 60,044 shows buying interest at lower levels and underlying trend strength. This movement suggests a healthy consolidation rather than a reversal. Immediate resistance is seen between 60,300 and 60,400, with crucial support in the 59,700–59,800 band. The daily RSI for Bank Nifty stands at 65.05 and is trending lower, indicating moderated momentum within a bullish zone. Traders are advised to maintain a positive bias with a buy-on-dips approach near support levels, coupled with disciplined risk management.
Five Breakout Stock Recommendations for January 5
Amid the ongoing market consolidation, Sumeet Bagadia has identified five stocks showing breakout patterns. Breakout stocks are those that move past established support or resistance levels, often signaling a potential strong price move.
1. PG Electroplast (PGEL): The stock is trading around ₹630.60 after a decisive falling trendline breakout. The RSI at 67.90 indicates a rising trend. Traders can consider buying at current levels with a stop loss of ₹600 for a target of ₹690.
2. Motherson Sumi Wiring India (MSUMI): Trading near ₹52.05, the stock has shown a wider range trendline breakout supported by healthy volumes. It trades above its key moving averages (20, 50, 200 EMA). The RSI of 71.96 suggests a rising bullish bias. The buy recommendation comes with a stop loss of ₹49.10 for a target of ₹56.70.
3. Emcure Pharmaceuticals (EMCURE): Priced around ₹1,489.50, the stock has witnessed a sideways range breakout, resuming its upward momentum. It trades above all major EMAs. With an RSI of 64.03, traders can buy with a stop loss of ₹1,420 for a target of ₹1,625.
4. CreditAccess Grameen (CREDITACC): At ₹1,331.30, the stock has broken out of a falling trendline, hinting at a potential trend reversal. The breakout is volume-backed, and the stock closed above its key EMAs. The RSI at 55.06 allows room for upside. The suggested strategy is to buy with a stop loss of ₹1,265 for a target of ₹1,460.
5. Voltas (VOLTAS): Trading at ₹1,476.80, Voltas has delivered a symmetrical triangle breakout, indicating a continuation of the bullish trend. It is above its key EMAs, and the RSI of 68.98 supports positive momentum. The recommendation is to buy with a stop loss of ₹1,410 for a target of ₹1,625.
Disclaimer: This analysis is for educational purposes only. The views and recommendations are those of the individual analyst. Investors are strongly advised to consult certified experts before making any investment decisions.
