On October 24, Indian benchmark indices extended their losing streak to a fourth consecutive session as rising crude oil prices, driven by escalating Middle East geopolitical tensions, fueled domestic inflation worries and disappointed investors. Amidst this market downturn, technical research analyst Nagaraj Shetti recommended selective buying opportunities, highlighting Bajaj Auto and Epigral as resilient short-term picks for traders looking to navigate the current volatility.
Geopolitical Strain and Earnings Drag Down Indian Benchmarks
The domestic equity market faced intense selling pressure, leading to a noticeable decline in key indices. The Nifty 50 index shed 0.27 percent to close at lower levels, while the S&P BSE Sensex dropped 0.24 percent, reflecting a broader risk-off sentiment across Dalal Street.
Global crude oil benchmarks surged past key resistance levels, directly threatening India’s fiscal balance since the country imports over 80 percent of its petroleum needs. This surge has reignited fears of retail inflation, which could prompt the Reserve Bank of India to maintain its hawkish monetary policy stance for longer than previously anticipated.
Compounding these macroeconomic headwinds, the ongoing second-quarter corporate earnings season has failed to revive investor confidence. Several corporate heavyweights reported weaker-than-expected margins, leading to institutional outflows and a general lack of buying conviction among retail participants.
Technical Outlook and Selective Buying Strategies
Despite the overarching bearish sentiment, market experts suggest that specific stocks exhibit strong technical setups that defy the broader market trend. Nagaraj Shetti, a senior technical research analyst at HDFC Securities, points to Bajaj Auto and Epigral as potential outperformers in the near term.
Shetti notes that while the benchmark indices are testing crucial support zones, individual stock picking based on price action and volume accumulation remains highly viable. By focusing on companies with robust balance sheets and clear technical breakouts, short-term traders can mitigate systemic index risks.
The strategy involves identifying equities that have completed their corrective phases and are showing signs of reversal. Both Bajaj Auto and Epigral have demonstrated these characteristics during recent trading sessions, making them prime candidates for tactical long positions.
Analyzing the Bull Case for Bajaj Auto
Bajaj Auto’s stock resilience comes on the back of strong export demand and a steady expansion of its electric vehicle (EV) portfolio. Despite the auto sector facing headwinds from rising raw material costs, the company has managed to maintain stable operating margins.
From a technical perspective, the stock has formed a strong base near its key moving averages. Shetti observes that Bajaj Auto has consistently defended its support levels during intraday market sell-offs, indicating strong institutional backing.
Analysts suggest that a potential breakout above immediate resistance levels could trigger a rapid short-covering rally. Traders are advised to accumulate the stock with a defined stop-loss, targeting a quick 5 to 7 percent upside in the coming weeks.
Epigral Shows Strong Technical Accumulation
Epigral, formerly known as Meghmani Finechem, has also caught the attention of technical analysts due to its resilient chart patterns. The specialty chemical manufacturer continues to benefit from import substitution trends and robust domestic demand for its chlor-alkali products.
The stock recently completed a healthy consolidation phase, forming a bullish cup-and-handle pattern on the daily charts. This pattern typically signals a continuation of the prior uptrend once resistance is cleared on high trading volumes.
Shetti emphasizes that Epigral’s relative strength index (RSI) has exited the oversold territory, confirming positive momentum. The stock’s ability to trade above its short-term moving averages during a broader market correction highlights its underlying strength.
Market Outlook and Key Triggers to Watch
The near-term trajectory of Indian equities remains closely tied to the movement of global oil prices and the Federal Reserve’s monetary policy decisions. Any further escalation in Middle Eastern conflicts could push crude prices higher, putting additional pressure on emerging market equities.
Investors will also closely monitor the weekly derivative expiry and foreign institutional investor (FII) capital flows. FIIs have been net sellers in recent sessions, shifting their focus to cheaper regional peers, which has depleted liquidity in large-cap Indian stocks.
For retail traders, the focus is rapidly shifting from broad market index plays to stock-specific strategies where risk management is paramount. In the coming weeks, the stabilization of the Nifty 50 around its psychological support levels will be critical in determining whether the market can stage a sustainable recovery or if further downside lies ahead.
