Nifty’s slump could hit a 23-year milestone with January close: Expert

For three straight months, Nifty has been on a downward spiral, leaving investors anxious and market watchers wary. As January nears its end, all eyes are on whether the index will close in the red yet again. If it does, it will mark an exceptionally rare occurrence – four consecutive months of losses, something that hasn’t been seen since 2001.

Rupak De, Senior Technical Analyst at LKP Securities, has been closely tracking the index. “January tends to be a tough month for Nifty. This time, the index has been stuck in a tight range of 23,000 to 23,400 for the past ten days, with little movement in the last three days. Historically, such calm before a storm often precedes a major event,” he explains. With the Union Budget just around the corner, he suggests a cautious, non-directional trading strategy for now.

A Glimpse into February

Looking ahead, February could be a game-changer. Historically, Nifty tends to recover after a challenging January, but the upcoming Budget could set the tone. Rupak remains cautious, adding, “The market’s direction will depend heavily on the budget’s outcomes. It’s difficult to predict a clear trend before this event.”

Stocks to Watch This Budget Week

For those eager to make the most of the upcoming volatility, Rupak has some recommendations:

Britannia Industries

Entry Point: ₹5,100

Target: ₹5,350

Stop Loss: ₹4,980

Britannia’s daily chart is showing promise, with an inverted head-and-shoulders pattern—a strong signal of a bullish reversal. If the stock can hold above ₹5,000, it could deliver solid returns, making it an exciting pick for the week.

Macrotech Developers

Entry Point: ₹1,100

Target: ₹1,200

Stop Loss: ₹1,050

After finding support at a previous swing low, Macrotech is showing signs of recovery. The RSI indicator is moving out of the oversold zone, and improved sentiment has helped the stock close higher for two consecutive days. With momentum on its side, ₹1,200 seems well within reach.

InfoEdge

Entry Point: ₹7,447

Target: ₹8,200

Stop Loss: ₹7,190

InfoEdge has formed a bullish engulfing pattern on its daily chart, signaling strength. Supported by the 200-day moving average, it’s poised for a move higher, especially with the RSI indicating a bullish crossover. This makes it a compelling buy for the short term.

Market Insights and Strategy

While January has been a challenge, it’s not all doom and gloom. Past trends reveal that Nifty typically delivers a 1.35% return in the week following the Budget. However, this year’s market movement will be anything but ordinary, with participants staying cautious and waiting for clarity.

As the market braces for the Budget, Rupak suggests keeping an eye on the key support levels of 23,000 and resistance zones at 23,200 and 23,450. “This calm won’t last forever. Post-budget, we’re bound to see a strong directional move,” he concludes.

For now, the best strategy might just be patience – and an eye on these promising stocks.