The Indian equity market witnessed a severe sell-off on Thursday, January 8, marking one of its worst trading sessions in recent months. The benchmark indices extended their losses for the fourth day in a row, eroding investor wealth significantly.
Market Carnage: Key Numbers and Triggers
The Sensex plummeted by 1,581 points, or 1.84%, while the Nifty 50 index fell 1.72% over the last four sessions. The Nifty closed below the psychologically crucial 25,900 level. This represented the sharpest single-day decline for the Sensex in over four months, sending shockwaves through Dalal Street.
Analysts pinpointed a confluence of negative factors driving the downturn. Primary concerns include the potential impact of a Russia sanctions bill, ongoing geopolitical tensions, and caution prevailing ahead of the third-quarter corporate results season. A major pain point has been the relentless outflow of foreign capital from Indian markets.
Expert Analysis: Technical Breakdown and Outlook
Ajit Mishra, Senior Vice President of Research at Religare Broking, provided a detailed technical and fundamental assessment. He stated that market sentiment soured due to heightened global trade worries and geopolitical risks, which severely dampened risk appetite. The persistent selling by Foreign Institutional Investors (FIIs), combined with a weakening Indian rupee, added further downward pressure.
Mishra highlighted a critical technical breach, noting that the Nifty 50 has broken below the lower band of its rising channel. It retested a major support zone near the previous swing low of 25,880. He warned that if the index sustains trading below this level, it could slide towards the 25,600–25,700 range.
On the resistance front, the earlier support at the short-term 20-day Dynamic Exponential Moving Average (DEMA), around 26,050, is now expected to act as an immediate hurdle. A stronger resistance lies near the 26,300 mark.
"Participants are advised to maintain strict risk management in existing short-term positions amid heightened volatility and wait for clearer directional cues," Mishra cautioned.
Short-Term Stock Picks from an Expert
Amid the broad-based decline, Religare Broking's Ajit Mishra identified three stocks with specific short-term trading strategies.
Bharat Electronics (BEL): Buy for a Target of ₹444
Mishra observed a positive shift in BEL's momentum, citing a decisive breakout from a downward-sloping trendline. The stock continues to trade well above its rising 200-day Exponential Moving Average (EMA), underscoring the underlying strength of its long-term bullish structure. This breakout, accompanied by higher trading volumes, suggests the corrective phase may be over, paving the way for the primary uptrend to resume. The recommended strategy is to buy with a target price of ₹444 and a stop loss set at ₹400.
Tata Consumer Products: Buy for a Target of ₹1,290
This FMCG stock has shown steady outperformance, forming a gradual upward trend. Mishra pointed out that after breaking out from a 'running cup and handle' continuation pattern, the stock has maintained a positive bias. It is now forming a higher base above the pattern's neckline, indicating accumulation. Trading above its key, positively aligned moving averages reinforces the uptrend's strength. Accumulation is advised for a potential move towards fresh highs, with a target of ₹1,290 and a stop loss at ₹1,140.
GAIL (India): Sell Futures for a Target of ₹154
In contrast, GAIL presents a bearish technical picture. Mishra highlighted its weakened intermediate trend, with the stock trading below the downward-sloping 20-week EMA, which now acts as resistance. A breakdown from a sideways consolidation range signals a loss of momentum after a prolonged correction. Subdued volumes indicate a lack of buying interest. The view is negative, recommending a sell in futures for a target of ₹154, with a stop loss at ₹168.
Disclaimer: This analysis is for educational purposes only. The views and recommendations are those of the individual analyst and not of the publication. Investors are strongly advised to consult certified experts before making any investment decisions, as market conditions are dynamic and individual circumstances vary.
