- You missed the warning signs in the last market dip, and now you could profit from the rebound.
- Broad market breadth favored bears: 2,067 decliners vs. 882 advancers on the NSE.
- Doji‑like candles and an oversold RSI hint at a short‑term bounce, but sustainability is uncertain.
- Six stocks show bullish base formations; three exhibit bearish breakdowns.
- Strategic entry, target, and stop‑loss levels are outlined for each trade idea.
You missed the warning signs in the last market dip, and now you could profit from the rebound.
Why the 0.33% Market Decline Matters for Your Portfolio
The Nifty closed 0.33% lower on January 21, marking the first sub‑1% pull‑back of the quarter. While the move looks modest, the internal dynamics are telling. A staggering 2,067 stocks fell while only 882 rose, indicating that the sell‑off is driven by breadth rather than a single sector shock. Technical analysts point to a doji‑type candle formation on the index and an RSI that slipped below the 30‑40 band, a classic oversold condition that often precedes a corrective rally.
Historically, similar breadth‑driven dips in Indian equities have been followed by 2‑4% rebounds within two weeks, especially when the RSI hovers near 35 and the moving averages converge. However, the key question is whether the bounce will be broad‑based or limited to a handful of resilient stocks. The answer lies in the sector‑level analysis that follows.
Tech Mahindra: Base Formation Signals Potential Upside
Tech Mahindra (CMP: Rs 1,686.7) is consolidating around its 20‑day and 50‑day moving averages, a classic sign of a forming base after a recent high‑water mark. The RSI sits at 35‑40, flirting with oversold territory, while momentum gauges are quiet but the selling pressure is easing near the support zone.
With the stock trading close to its short‑term averages, a breakout above the 20‑DMA could trigger a short‑term rally toward Rs 1,744. Traders should place a stop‑loss around Rs 1,652 to guard against a false breakout.
UltraTech Cement: Consolidation With Bullish Bias
UltraTech Cement (CMP: Rs 12,231) is perched on a multi‑timeframe support cluster: 20‑, 50‑, and 200‑day moving averages all converge near the current price. Volume has been healthy, suggesting institutional accumulation.
The RSI is neutral, indicating the stock is neither overbought nor oversold. MACD lines are flat but above zero, hinting at underlying bullish momentum. If the price holds above the key support band, the next target lies at Rs 12,594, with a stop‑loss set at Rs 12,010.
TVS Motor Company: Oversold Conditions and Support Levels
TVS Motor (CMP: Rs 3,602) is flirting with a strong support window of Rs 3,550‑3,600. The daily RSI is deep in oversold territory, while MACD and Stochastic both signal potential reversal.
A decisive close above Rs 3,500 could reignite short‑covering, pushing the stock toward Rs 3,753. Conversely, a break below Rs 3,500 would likely extend the correction, making the Rs 3,512 stop‑loss a critical guardrail.
JK Tyre & Industries: Breakout Potential After Consolidation
JK Tyre (CMP: Rs 510.95) has been range‑bound between Rs 483‑525 since late December. The stock remains above its 20‑day EMA, and the RSI has reclaimed the 60 level, indicating bullish momentum.
MACD stays positive, and the price is holding above the Bollinger Band mid‑line. Accumulating in the Rs 505‑510 zone could position traders for an upside breakout toward Rs 545, with a stop‑loss at Rs 490.
Paytm: Bearish Breakdown and Risk Management
Paytm (CMP: Rs 1,235.9) broke out of a December‑January consolidation range, closing below the lower boundary on Jan 21. The RSI dropped below 40, and the directional index (DI‑) crossed above DI+, confirming bearish dominance.
Technical consensus suggests further downside to Rs 1,130. Traders should sell in the Rs 1,235‑1,230 zone, protecting positions with a stop‑loss at Rs 1,265.
Hindustan Zinc: Ascending Trend Continues
Hindustan Zinc (CMP: Rs 697.55) maintains an ascending triangle across multiple timeframes. The RSI has entered a bullish crossover, and the price sits comfortably above the 20‑EMA.
Assuming support at Rs 685 holds, the next rally could target Rs 730. A breach below Rs 685 would trigger a short‑term pullback.
Aditya Birla Capital: Weakness Signals Further Decline
Aditya Birla Capital (CMP: Rs 346.25) slipped below both its 20‑day and 50‑day EMAs, turning the technical picture bearish. The RSI is in a bearish crossover, hinting at continued pressure.
Short‑term targets point to Rs 331, with resistance at Rs 353. Traders should consider selling or tightening positions.
Havells India: Why Selling Rallies May Protect Gains
Havells India (CMP: Rs 1,316) broke down from a recent consolidation zone and has stayed below the 20‑EMA for two sessions. The RSI is trending lower, reinforcing bearish sentiment.
Given the sharp decline, it may be prudent to sell on short‑term rallies rather than buying at current levels. A target of Rs 1,280 is realistic, with a protective stop at Rs 1,365.
Investor Playbook: Bull vs. Bear Cases
Bull Case: If the market breadth reverses and the RSI climbs above 45, the base‑forming stocks—Tech Mahindra, UltraTech Cement, and TVS Motor—could spark a 2‑3% rally in the Nifty within ten trading days. Accumulating these equities at the suggested entry points would capture upside while limiting risk via tight stops.
Bear Case: A failure of the support zones (e.g., Tech Mahindra below Rs 1,652 or UltraTech Cement below Rs 12,010) could extend the bearish breadth, pushing the index below the 50‑day EMA. In that scenario, defensive positions such as Paytm, Aditya Birla Capital, and Havells India should be trimmed, and cash re‑allocated to safer havens like government bonds or gold.
Bottom line: The market’s technical snapshot points to a potential short‑term bounce, but the durability of that rebound hinges on whether key support levels hold across the highlighted stocks. Align your trades with the price action, respect the stop‑losses, and let the data—not the headlines—drive your next move.