The Indian equity markets experienced a significant downturn last week, with key benchmark indices facing intense selling pressure. The sentiment turned decidedly negative, leading to substantial losses for investors across large-cap, mid-cap, and small-cap segments.
Market Carnage: A Detailed Look at the Losses
The Nifty 50 index concluded the week with a sharp decline of 2.37%. The fall was even more severe for the 30-share BSE Sensex, which plummeted by a staggering 2185 points. The pain was not uniform across sectors. While the Defence index managed to gain 1.30%, other sectors bore the brunt of the sell-off. The India Tourism, Oil & Gas, and Energy indices were among the worst performers, each shedding over 5% of their value.
The broader market space suffered a more pronounced correction. The Nifty Mid-cap 100 Index slipped 0.79%, and the Nifty Small-cap 100 Index plunged 1.81%. This severe downturn led to a sharp deterioration in market breadth, where declining stocks vastly outnumbered advancing ones. The BSE advance-decline ratio stood at a weak 0.34, indicating widespread selling, particularly in mid and small-cap stocks. The total turnover in the NSE cash market was also lower by 2% compared to the previous session.
Expert Analysis: Why the Market Turned Nervous
Sumeet Bagadia, Executive Director at Choice Broking, provided insight into the market's nervous sentiment. He pointed out that the Nifty 50 index broke below a crucial support level, the 50-day Exponential Moving Average (DEMA) at 25,900, and subsequently moved closer to its 20-DEMA support placed at 25,530.
"The Indian stock market sentiment has turned nervous as the Nifty 50 index went further down," Bagadia stated. He emphasized that for bullish conviction to strengthen, the index needs to close above the 25,900 level. On the downside, he warned that the situation could worsen if the index breaches the 25,500 support mark.
Stocks to Consider Amid the Volatility
Despite the bearish broader trend, Bagadia identified three stocks that appear strong on technical charts and could present buying opportunities in the coming week.
1. Eternal: A Potential Reversal Play
Bagadia recommends buying Eternal at ₹284.35, with a target of ₹310 and a stop loss at ₹275. The stock is currently in a corrective phase after a prior uptrend. It is now stabilizing near its 200 EMA (around ₹286), which acts as a critical long-term support. Signs of buying interest are emerging, suggesting downside momentum is slowing. The key support to watch is the ₹275 zone; holding above it keeps the broader uptrend intact.
2. Asian Paints: Displaying Strong Trend Reversal
Asian Paints is showing a strong trend reversal setup. The recommendation is to buy at ₹2825, target ₹3000, with a stop loss at ₹2725. The stock has broken above its 200 EMA and is trading comfortably above its 20 and 50 EMAs, with these averages turning upward. Volume expansion during the breakout signals strong demand. The ₹2725 level now acts as a crucial demand zone.
3. BEL: Bullish Trend Continuation
For Bharat Electronics Ltd (BEL), Bagadia suggests buying at ₹418, targeting ₹450, and keeping a stop loss at ₹405. The stock exhibits a bullish continuation pattern after a period of healthy consolidation. It is trading above its key moving averages, and the 20 and 50 EMAs are beginning to turn upward. The ₹405 zone, aligned with the 20 and 50-day EMA cluster, serves as a strong support area.
Disclaimer: This article is for educational purposes only. The views and recommendations are those of the individual analyst and not of Mint. Investors are strongly advised to consult with certified experts before making any investment decisions.
