A day after falling by 0.40% each, the Sensex fell over 1,200 points, or 1.5% to an intraday low of 82,010.58 on Tuesday, while the Nifty 50 breached 25,200 on the downside, falling to 25,171.35 in intraday trade.
The Sensex finally closed 1,066 points, or 1.28%, down at 82,180.47, while the Nifty 50 closed at 25,232.50, with a loss of 353 points, or 1.38%.
The BSE Midcap index crashed 2.52%, while the Smallcap indices plunged 2.74%.
Two stock recommendations for 21 January by MarketSmith India
Buy: HDFC Bank Ltd (current price: ₹930)
- Why it’s recommended: Strong retail and corporate banking franchise, consistent earnings and ROE track record, robust asset quality and risk management, well-capitalised balance sheet, pan-India distribution and digital strength, and experienced management and governance.
- Key metrics: P/E: 18.51, 52-week high: ₹1020.50, volume: ₹3350.55 crore
- Technical analysis: RSI divergence
- Risk factors: Slower growth during post-merger integration, margin pressure from rising competition, dependence on the overall credit cycle, regulatory and compliance risks, valuation sensitivity versus peers, and higher operating costs during expansion.
- Buy at: ₹920-940
- Target price: ₹995 in two to three months
- Stop loss: ₹895
Buy: Tata Consumer Products Ltd (current price: ₹1180)
- Why it’s recommended: Strong Tata brand trust, diversified FMCG portfolio, leadership in tea and salt, growing foods and beverages segment, expanding distribution reach, focus on premium and health products, and consistent cash flows.
- Key metrics: P/E: 82.48, 52-week high: ₹1220.90, volume: ₹241.81 crore
- Technical analysis: 50-DMA bounce
- Risk factors: Intense FMCG competition, commodity price volatility, margin pressure from inflation, slower growth in legacy tea, dependence on rural demand, and execution risk in new categories.
- Buy at: ₹1170-1190
- Target price: ₹1330 in two to three months
- Stop loss: ₹1130
How the Nifty 50 performed on 20 January
Indian equities closed sharply lower on Monday, with benchmark indices under sustained selling pressure through the session. The Nifty 50 ended down 1.38% at 25,232.5, breaching key short-term supports after opening weak and sliding steadily to an intraday low near 25,170. The broader tone was decisively bearish, reflected in a poor market breadth where declines overwhelmed advances, with roughly 539 stocks advancing against 2,688 declines, underscoring risk-off sentiment across the board.
Sectorally, losses were broad-based, led by realty, consumer durables, IT, healthcare, metals and autos, while financials and FMCG also remained under pressure, offering little downside protection. Mid- and small-cap segments underperformed, adding to overall weakness.
From a technical standpoint, the Nifty 50 witnessed a decisive shift in near-term price structure during today’s session. The index formed a strong bearish candle on the daily chart, reflecting persistent selling pressure throughout the day and confirming a breakdown from the recent consolidation phase. Notably, today’s decline has resulted in a clear breach of the 100-day moving average, highlighting weakening short- to medium-term momentum, while the index is currently hovering marginally above the 200-day exponential moving average. Momentum indicators corroborate this shift: the Relative Strength Index has slipped below the neutral 50 mark and is trending lower, pointing to increasing bearish momentum without yet entering deeply oversold territory. Meanwhile, the MACD has rolled over with a negative crossover and an expanding histogram on the downside, reinforcing the view of strengthening downside momentum.
Under O’Neil’s market direction framework, the market has shifted into a Downtrend after the Nifty breached its 100-day moving average, indicating weakening intermediate momentum. A rally attempt would emerge if the index closes positive or in the upper half of its daily range and holds above that low for three consecutive sessions. A subsequent Follow-Through Day (FTD) would be required to confirm a transition back to an Uptrend, signalling renewed institutional participation.
The Nifty has breached its 100-day moving average, indicating a weakening of near-term momentum. On the downside, immediate support is seen in the 25,200-25,100 zone, with a deeper corrective move likely to be cushioned near 24,600. On the upside, the index is expected to remain volatile and trade within a broad range of 25,200–25,600 in the near term, as markets seek fresh directional cues.
How did Nifty Bank perform?
The Nifty Bank index opened on a negative note and, after some time, witnessed mild buying interest; however, it failed to sustain at higher levels and eventually closed in the red. The index opened at 59,851.40, moved up to an intraday high of 59,993.50, but selling pressure near the peak led to profit booking. It then declined to an intraday low of 59,283.95 and finally settled at 59,404.20, ending the session lower by 487.15 points. The index formed its second consecutive bearish candle on the daily chart
From a momentum standpoint, the RSI (14) is placed near 49, slipping below the neutral 50 mark, which indicates weakening short-term momentum but not an oversold condition. This suggests consolidation rather than aggressive downside pressure. The MACD continues to remain below the zero line. The indicators collectively point towards a pause in the ongoing uptrend rather than a trend reversal. As per O’Neil’s market direction framework, the Nifty Bank index remains classified under a Confirmed Uptrend.
The index ended the session on a negative note and drifted toward its 50-day moving average, managing to close marginally above this critical support level. If selling pressure persists, a breach of the 50 DMA cannot be ruled out, which may invite additional downside momentum.
Immediate support is placed in the 59,000–58,700 zone, where some buying interest could emerge. On the upside, a technical rebound remains possible; however, sustained buying interest and an improvement in overall market breadth would be essential for the index to retest its immediate resistance near 60,437. A decisive breakout above this level could gradually open the path toward the 60,500–61,000 range in the near term.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O’Neil. You can access a 10-day free trial by registering on its website.
Trade name: William O’Neil India Pvt. Ltd.
Sebi Registration No.: INH000015543
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
