Stocks to buy or sell: The Indian stock market suffered significant losses last week amid persistent foreign capital outflows, the rupee’s fall to record lows, mixed Q3 results, and geopolitical uncertainties.
Equity benchmark Nifty 50 dropped 2.5% for the week ended January 23. On a monthly scale, the index is down more than 4% in January so far, looking set to extend losses for the second consecutive month.
Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, highlighted that the index decisively breached the 25,400 support level, falling below the psychological 25,000 mark and moving towards the 24,900 zone.
“At this juncture, there is a possibility of a retest of 24,900 or a marginal break below it, which could facilitate the completion of the ongoing corrective phase. If the index fails to stabilise around 24,800, the previous base near 24,500–24,400 emerges as the next significant demand zone,” said Patel.
However, Patel added that the likelihood of such an extended decline appears relatively low.
He underscored that hourly charts indicate early signs of potential positive Relative Strength Index (RSI) divergence, suggesting that the downward momentum may be decelerating.
“Once a fresh low is established, the market is anticipated to transition into a base-building phase, even if broader markets experience a slightly extended but likely final leg of decline. A recovery towards 25,400 may follow, while a sustainable bottom will be confirmed only upon a decisive move back above 25,400. Traders are advised to exercise caution, avoid aggressive bottom-fishing, and await clear confirmation before taking fresh directional positions,” said Patel.
Stock picks for the short term
Jigar Patel recommends buying the following three stocks for the next one to two weeks:
One 97 Communications (Paytm) | Previous close: ₹1,138.80 | Sell | Target price: ₹1,030 | Stop loss: ₹1,030
Patel said Paytm has experienced a significant decline below its 50-day (DEMA), resulting in a substantial single-day drop and altering its near-term technical structure.
He highlighted that prior to this decline, the stock exhibited clear signs of distribution in the ₹1,250–1,350 range, where sustained volumes indicated silent selling at higher levels.
On the technical indicators, bearish divergence was evident, signalling weakening momentum ahead of the breakdown.
“Currently, the Relative Strength Index (RSI) is near the 30 mark, reflecting weak sentiment, while the Directional Movement Index (DMI) remains firmly negative, confirming the downtrend,” said Patel.
“After a nearly 10% decline in the previous session, a short-term technical pullback or dead cat bounce cannot be ruled out, potentially extending towards the ₹1,200 level. Therefore, we recommend a sell-on-rise strategy,” Said Patel.
“Short positions can be initiated in the ₹1,230–1,200 zone, with a stop loss at ₹1,311 on a daily closing basis and a downside target of ₹1,030,” Patel said.
Bajaj Auto | Previous close: ₹9,413.50 | Accumulate | Target price: ₹10,200 | Stop loss: ₹9,000
Patel highlighted that Bajaj Auto has successfully retested its falling trendline after a decisive breakout, supported by healthy volumes, confirming the breakout’s validity.
The stock is also trading comfortably above the 20-day and 50-day DEMA, both of which are well-placed and acting as strong dynamic supports.
On the momentum front, the daily Stochastics oscillator has formed a hidden bullish divergence, indicating underlying strength and the potential for continuation of the prevailing uptrend.
“The overall technical setup suggests improving price structure with favourable risk-reward. In view of the confluence of trendline support, moving average alignment, and positive momentum signals, the stock appears well-positioned for further upside,” said Patel.
“We recommend accumulating Bajaj Auto in the ₹9,420–9,350 zone, with an upside target of ₹10,200, while keeping a stop loss at ₹9,000 on a daily closing basis,” Patel said.
ONGC | Previous close: ₹245.47 | Buy | Target price: ₹268 | Stop loss: ₹230
Patel said ONGC has successfully retested the neckline of an inverse head-and-shoulders pattern after a decisive breakout supported by healthy volumes, reinforcing the strength of the reversal.
The stock has recently sustained above its 50-day DEMA, accompanied by a notable pickup in trading activity, indicating renewed buying interest.
Momentum indicators are also aligning positively: the DMI suggests improving trend strength, RSI is holding in a bullish zone, and Stochastics point toward further upside momentum.
This confluence of price action and indicator support signals a favourable risk–reward setup for the counter.
“From a trading perspective, ONGC looks well placed for a continuation of the upward move. We recommend adopting a long position in the ₹245–243 zone, with an upside target of ₹268, while maintaining a strict stop loss at ₹230 on a daily closing basis,” said Patel.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
