Indian Stock Market Faces Pressure in January Amid Multiple Headwinds
The Indian stock market has been experiencing significant pressure throughout January, driven by a combination of relentless selling by foreign institutional investors (FIIs), heightened geopolitical risks, mixed third-quarter earnings reports, and investor caution ahead of the Union Budget 2026. This confluence of factors has created a challenging environment for equities, with the benchmark Nifty 50 index declining over 4% so far this month. On a weekly basis, the index registered a loss of 2.5% last week, reflecting the ongoing bearish sentiment.
Technical Outlook Points to Fragile Market Setup
Aakash Shah, a technical research analyst at Choice Equity Broking Private Limited, provided insights into the current market dynamics. He highlighted that the Nifty 50 continues to trade below its short-term moving averages, indicating a fragile and vulnerable setup. "The 25,200–25,300 zone is now seen as immediate resistance, and any pullback towards this area may invite selling pressure. On the downside, 25,000 remains a critical psychological and technical support," Shah explained. He further cautioned that a decisive breakdown below the 25,000 level could accelerate weakness towards the 24,950–24,900 region in the near term. While momentum indicators remain subdued, oversold conditions might lead to brief, stock-specific relief rallies, offering selective opportunities for traders.
Expert's Top Three Stock Recommendations for Short-Term Gains
Despite the broader market weakness, Aakash Shah has identified three stocks that present promising short-term trading opportunities for the next one to two weeks. These picks are based on technical analysis and chart patterns, aiming to capitalize on potential bullish movements.
Hindustan Zinc: Bullish Continuation Setup
Buy at ₹698 | Target Price: ₹750 | Stop Loss: ₹650
Shah notes that Hindustan Zinc is displaying a strong bullish continuation setup on the daily chart following a prolonged consolidation phase. The stock has transitioned into a well-defined uptrend, characterized by higher highs and higher lows, which signals sustained buying interest and robust trend strength. A decisive breakout above the previous resistance zone near ₹650–655 has converted this area into a strong support level. This breakout is supported by a wide-range bullish candle, indicating aggressive buyer participation and confirming the move's strength. The stock is comfortably trading above key exponential moving averages (EMAs), with all averages aligned in a bullish order and sloping upward, reflecting strong momentum across short-, medium-, and long-term timeframes. Volume has expanded significantly during the breakout and subsequent rally, while minor pullbacks have occurred on relatively lower volume, suggesting healthy accumulation rather than distribution. "Structurally, the zone around ₹650–655 now acts as a key demand area and trend-defining support. As long as Hindustan Zinc sustains above this level, the bullish structure remains intact and favours continuation toward the ₹750-resistance zone, with potential for further upside if momentum persists," Shah stated.
Baazar Style Retail: Trend Reversal and Bullish Continuation
Buy at ₹334 | Target Price: ₹390 | Stop Loss: ₹305
According to Shah, Baazar Style Retail is showing a strong trend reversal and bullish continuation setup on the daily chart after a prolonged corrective decline. The stock has staged a sharp recovery from lower levels, forming a solid base and signaling a clear shift from bearish to bullish momentum. Price has decisively moved above the key EMAs, with short-term averages crossing above the long-term EMAs, indicating strengthening momentum across all timeframes and confirming a change in the broader trend structure. The recent breakout is supported by strong bullish candles and a notable surge in volume, pointing to aggressive accumulation. Previous declines were marked by relatively lower volume, suggesting that selling pressure has been absorbed at lower levels. "Structurally, the ₹305 level now acts as a key support area and trend-defining level. As long as the stock holds above this support, the bullish structure remains intact and favours continuation toward the ₹390 resistance level," Shah explained.
UltraTech Cement: Bullish Recovery and Trend Resumption
Buy at ₹12,369 | Target Price: ₹13,000 | Stop Loss: ₹11,900
Shah pointed out that UltraTech Cement is exhibiting a bullish recovery and trend resumption setup on the daily chart after a healthy corrective phase. Price action indicates a shift back toward bullish momentum, supported by higher lows formed after the recent decline. The stock has reclaimed the 20 EMA and 50 EMA, with both averages turning upward, signaling strengthening short-term momentum. It is also trading above the 100 EMA and 200 EMA, reflecting stability in the medium- to long-term trend and confirming a broader bullish bias. The recent move higher is supported by steady volume expansion, indicating improving participation from buyers. Pullbacks during the prior correction were accompanied by relatively moderate volume, suggesting controlled profit booking rather than aggressive selling. "Structurally, the demand zone around ₹11,900 now acts as a key support base. As long as price holds above this zone, the recovery structure remains intact and favours continuation toward the ₹13,000 resistance zone on sustained strength," Shah added.
Important Disclaimer and Investor Caution
This analysis is provided for educational purposes only. The views and recommendations expressed are those of the expert and not of any financial publication. Investors are strongly advised to consult with certified financial experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary. Trading in the stock market involves risks, and past performance is not indicative of future results.
