Indian equity markets face a bearish outlook as the Nifty breaks key supports. Analysts predict further declines, with the Nifty potentially testing the 25,300 to 25,350 levels. Sentiment is unlikely to improve without a strong rebound above 26,100. Investors are advised to adopt a sell-on-rise strategy.
The Nifty enters the new week on a weak footing after breaking key trend supports and short term moving averages, signalling a bearish bias. Persistent selling on intraday recoveries and rise in volatility suggest downside risks toward the 25,300-25,350 zone, while sentiment is unlikely to stabilise unless the index decisively moves back above the 25,900-26,100 resistance band.
SOMIL MEHTA
HEAD OF ALTERNATE RESEARCH, MIRAE ASSET SHAREKHAN
Where is Nifty headed?
The Nifty has broken below its ascending trendline and closed under the key 20-day moving average (DMA) of 26,062 and the 40-DMA at 25,970, confirming short-term weakness. Momentum indicators have flashed a negative crossover. The index could drift toward 25,300, with a “sell on rise” strategy advisable until a decisive break above the 26,100 resistance. A put-call ratio of 0.51 signals bearish sentiment, while volatility is likely to persist. Trading strategies Nifty (Positional): Sell on a bounce toward 26,000 for targets of 25,800 and 25,300, with a stop loss at 26,200. Avoid fresh long positions until a DEMA crossover reversal is seen.
TOP STOCKS
LIC: Sell at Rs 830, stop loss at Rs 860, target Rs 750. The stock has broken a bearish flag pattern on the daily chart and is trading below its 20-day moving average. Momentum indicators have given a negative crossover, and the trend is expected to continue downward.
CAMS: Sell at Rs 727, stop loss at Rs 760, target Rs 650. The stock has broken a bearish triangle pattern on the daily chart and is trading below its 20-day moving average. Momentum indicators have turned negative, suggesting further downside.
RUPAK DE
SENIOR TECHNICAL ANALYST, LKP SECURITIES
Where is Nifty headed?
Technically, the index has broken below its rising trendline, indicating rising bearish sentiment across the market. It has also slipped below its 50-day EMA (25,902.7) on the daily timeframe for the first time in over three months, signalling a bearish shift in trend. India VIX has spiked sharply and moved above its 50-day EMA (10.6), reflecting heightened investor anxiety. Trading strategies Bank Nifty has formed a dark cloud cover pattern on the weekly chart, a bearish reversal signal. A selling opportunity may emerge once Bank Nifty falls below last week’s low of 59,154. Traders can sell Bank Nifty below 59,150 for a target of 58,800, with a stop loss above 59,300.
TOP STOCKS
Hindustan Zinc: Sell below Rs 606, stop loss at Rs 615, target Rs 585. The stock saw a pullback in the last session after sharp selling in the prior two sessions. While it recovered marginally, it faced resistance near the 38.2% Fibonacci retracement level before closing lower. The RSI is also exiting the overbought zone with a bearish crossover.
Emcure Pharmaceuticals: Buy at Rs 1,541, stop loss at Rs 1,494, target Rs 1,660. Stock has broken out of a 3-month consolidation, indicating pickup in buying. Technical indicators and overlays support positive momentum.
DHUPESH DHAMEJA
RESEARCH ANALYST, SAMCO SECURITIES
Where is Nifty headed? Technically, the Nifty has slipped into a crucial make or-break zone near 25,600, where the 20-week EMA and 100-day EMA converge. Market structure has weakened, with every intraday recovery over the past week facing swift selling pressure and the index closing below the previous day’s high for five straight sessions. The breakdown below the 25,700-demand zone has amplified downside risks. Trading below the 20-day and 50-day EMAs, the 25,900-26,000 zone has now turned into strong overhead supply. With the RSI below 40, a sustained breach of 25,600 could drag the index toward 25,350, while only a decisive move above 26,100 would restore bullish confidence. Trading strategies Adopt a sell-on-rise approach near the 25,800-25,850 zone, with a stop loss above 25,950, targeting 25,400-25,450 on the downside. Options traders may deploy a bear call spread by selling the 25,500 CE and buying the 25,750 CE of the January 20 expiry to benefit from overhead resistance with limited risk.
TOP STOCKS
The Ramco Cements: Buy at Rs 1,093.80, stop loss at Rs 1,035, target Rs 1,200. The stock is displaying a constructive bullish setup after forming a base above the rising 200-DEMA, with higher lows signalling accumulation on dips following the correction from the Rs 1,180 zone.
The upward turn in the 20-DEMA and 50-DEMA, supported by improved volumes and an RSI near 68, reinforces strong momentum without signs of exhaustion.
Endurance Technologies: Buy at Rs 2,622, stop loss at Rs 2,520, target Rs 2,810. The stock is showing early signs of a bullish reversal after a base-building phase, with a decisive breakout above the declining trendline signalling a shift in short-term structure. Sustained trading above the 200-DEMA at Rs 2,584 and the formation of a higher low point to improving price strength.
