Indian equity markets experienced a significant downturn over four consecutive sessions, erasing all gains from the previous week. This sell-off was primarily driven by sustained foreign institutional investor (FII) outflows and mounting global geopolitical tensions.
Market Correction and Global Headwinds
The benchmark Nifty index witnessed a sharp correction, forming a sizable bearish candle on Thursday, January 8, 2026. It recorded a lower high and a lower low, marking the fourth straight session of decline. Crucially, the index breached the rising trendline connecting recent swing lows and slipped below its 50-day Exponential Moving Average (EMA) for the first time since October 3, 2025. This signals a deterioration in the short-term price structure.
The downturn was fueled by a cocktail of global uncertainties. Speculation around potential US military action in Venezuela, evolving developments in Greenland, and comments by the US President regarding India's procurement of Russian oil spooked investors. The latter raised fears of possible tariff actions against India, further dampening market sentiment and prompting widespread risk aversion.
Technical Outlook for Key Indices
Nifty Support and Resistance Levels
Analysts at Bajaj Broking Research suggest that continued weakness could push the Nifty down towards the 25,700–25,600 zone. This area is a critical medium-term support as it converges the previous month's low and the 100-day EMA. On the shorter-term horizon, momentum indicators show the market is in oversold territory, making a technical pullback a possibility. However, for the corrective phase to pause, the index must close above the previous session's high and decisively reclaim the 26,100 level. Immediate key resistance is placed at the 26,300 mark, which represents the near-identical highs of the past two months.
Bank Nifty's Relative Strength
In contrast to the Nifty, the Bank Nifty index displayed clear relative strength, rallying to a fresh all-time high of 60,437 during the week. The research house expects the index to consolidate within a 59,500–60,400 range. A decisive breakout above or a breakdown below this range will determine the next directional move. Immediate support is seen at 59,500, while a crucial short-term support zone lies between 59,000 and 58,700. This zone is significant due to the confluence of the 50-day EMA and the previous month's low.
Stock-Specific Recommendations for Investors
Bajaj Broking Research has identified two stocks as top picks for January 9, 2026, providing fresh entry opportunities for investors.
Hindustan Unilever (HUL): The research recommends buying HUL in the range of Rs 2,360–2,390. The stock has broken out above a falling trendline connecting the highs of the last two months, signaling a resumption of its upward move. On the downside, key support is placed at the 2,300–2,250 levels. The firm has set a price target of Rs 2,520 (representing a 6% return) with a stop-loss at Rs 2,290. The target aligns with the 61.8% Fibonacci retracement level of the previous major decline from 2,667 to 2,245.
Tata Power: Investors are advised to consider Tata Power in the Rs 368–375 range. The stock is trading sideways within a well-defined rectangle pattern between Rs 370 and Rs 410 on the daily chart. Consistent buying support is observed near the Rs 370 zone. The research expects the stock to rebound from the lower band of this range and head towards the upper band around Rs 405 (a 9% return) over a three-month period. The stop-loss for this trade is set at Rs 349. Key support on the lower side is placed at the 355–350 levels.
Disclaimer: The recommendations and views expressed are those of Bajaj Broking Research and do not represent the views of The Times of India. Investors are advised to consult certified experts before making any investment decisions.
