The volatility of the Indian equity markets often creates a psychological divide between cautious observers and technical traders. Following a sharp slide in the Nifty 50 on Monday—triggered largely by geopolitical tensions and the collapse of ceasefire talks—many investors feared a reversal of recent gains. However, a deeper dive into the price action suggests that the broader structural uptrend remains intact.
Nagaraj Shetti, Senior Technical Analyst at HDFC Securities, argues that the recent dip is a technical correction rather than a systemic trend reversal. For those tracking the Nifty finds support: Nagaraj Shetti spots 2 breakout stocks worth watching, the focus shifts from the immediate noise of headlines to the “higher bottom” formation on the charts—a classic signal that buyers are stepping in at lower price levels, effectively neutralizing the momentum of sellers.
The index had previously rallied nearly 1,800 points in recent sessions, creating a steep climb that often necessitates a period of consolidation. By identifying specific support zones and high-conviction stock setups, Shetti suggests that the current environment may actually offer a disciplined entry point for those who missed the initial surge.
Decoding the Nifty’s Structural Support
In technical analysis, the sequence of “lower tops and lower bottoms” defines a downtrend. When an index begins to form a “higher bottom,” it indicates a shift in sentiment. According to Shetti, the Monday decline did not damage the underlying recovery phase. Instead, it provided a test of the index’s resilience.
The critical area to monitor is the 23,400 to 23,500 zone. As long as the Nifty holds above this threshold, the bullish case remains viable. Conversely, the path to further gains requires a decisive breach of the 24,000 to 24,100 range. A close above these levels is viewed as the catalyst that would likely invite fresh momentum buyers, potentially clearing the path toward the 24,500 mark in the near term.
This tug-of-war between geopolitical headwinds and technical strength is a common occurrence in emerging markets. Even as headlines regarding ceasefire failures can trigger algorithmic selling and panic, the structural integrity of the chart often tells a different story about where the “smart money” is positioning itself.
Strategic Breakouts: Glenmark and Oberoi Realty
While the broad index provides the context, individual stock selection allows traders to capture alpha. Shetti has highlighted two specific companies—one in pharmaceuticals and one in real estate—that exhibit “clean” technical setups with defined risk-reward parameters.
Glenmark Pharmaceuticals: The Consolidation Play
Glenmark Pharmaceuticals has been recovering steadily from lower levels and is currently in a phase of consolidation. In trading terms, consolidation is often the “coiling” phase before a significant move. The stock is currently perched at the edge of its consolidation range, suggesting that a breakout is imminent.
The strategy here is based on confirmation. A move above the Rs 2,210 level would confirm the breakout, offering a potential upside of approximately 105 points against a limited downside risk of 55 points. This disciplined approach ensures that the trader is not guessing the direction but reacting to confirmed price action.
Oberoi Realty: Momentum and Moving Averages
In the real estate sector, Oberoi Realty presents a more aggressive momentum play. The stock recently staged a sharp recovery, characterized by a “gap up”—where the opening price is significantly higher than the previous day’s close. Crucially, this gap has remained open for several sessions, indicating that buyers are defending these higher prices.
the stock has reclaimed its 200-day exponential moving average (EMA). For long-term investors and technical analysts, the 200-day EMA is a primary barometer for the long-term trend; reclaiming it often signals a transition from a bearish to a bullish regime.
| Stock Name | Buy Level (INR) | Target (INR) | Stop Loss (INR) |
|---|---|---|---|
| Glenmark Pharmaceuticals | 2,205 | 2,310 | 2,150 |
| Oberoi Realty | 1,684 | 1,800 | 1,630 |
The Broader Market Implications
The current market dynamic highlights a recurring theme in global finance: the disconnect between short-term volatility and long-term structure. Geopolitical events are notoriously difficult to time and often create “noise” that obscures the underlying trend. For the Nifty, the shift from months of lower lows to a higher bottom is a meaningful transition that suggests the market is absorbing the shocks of external volatility.
For investors sitting on the sidelines, the risk profile has shifted. The danger of “entering too early” is now being balanced by the risk of “missing the move.” By utilizing quality setups with strict stop-losses—such as those identified in the pharma and real estate sectors—investors can participate in the recovery without exposing themselves to unmanaged directional risk.
The immediate focus for market participants will be the daily closing prices relative to the 24,100 level. This will determine whether the market enters a phase of aggressive expansion or remains in a choppy, sideways range.
Disclaimer: Investing in equity markets involves significant risk. The technical levels and stock recommendations mentioned are based on analyst views and are intended for informational purposes only. Please consult with a certified financial advisor before making any investment decisions.
The next critical checkpoint for the markets will be the upcoming weekly closing of the Nifty 50, which will confirm whether the 23,400 support zone can hold against continued geopolitical uncertainty. We will continue to monitor these levels as the trend evolves.
Do you agree with the bullish outlook on the Nifty, or do you believe geopolitical risks are being underestimated? Share your thoughts in the comments below.
