Sumeet Bagadia Recommends Five Breakout Stocks as Markets Stage Sharp Recovery
Indian markets recovered strongly on Monday, January 12, with Sensex gaining 302 points to 83,878.17 and Nifty 50 rising 107 points to 25,790.25, breaking their five-session losing streak. Choice Broking's Sumeet Bagadia recommends five breakout stocks: Fedbank Financial Services, Asian Paints, Nestle India, Alkem Laboratories, and Union Bank of India, all showing strong technical patterns above key support levels with clear targets and stop-loss levels for risk management.
*this image is generated using AI for illustrative purposes only.
Indian equity markets staged a remarkable recovery on Monday, January 12, breaking their five-session losing streak as value buying emerged in oversold conditions. The recovery was supported by signs of progress in US-India trade deal discussions, leading to strong intraday buying interest across key indices.
Market Performance Overview
The benchmark indices demonstrated significant resilience during Monday's trading session. The performance metrics highlight the strength of the recovery:
| Index | Opening Trend | Intraday Low | Closing Level | Daily Gain | Recovery Points |
|---|---|---|---|---|---|
| Sensex | Declined initially | 82,861 | 83,878.17 | +302 pts (0.36%) | 1,017 pts |
| Nifty 50 | Flat opening | Not specified | 25,790.25 | +107 pts (0.42%) | ~330 pts |
Technical Outlook and Strategy
Nifty 50 Analysis
According to Sumeet Bagadia, Executive Director at Choice Broking, the Nifty 50's performance showcased strong intraday buying interest and resilience at lower levels. The index decisively broke above the resistance of 25,750 and closed at 25,790.25, reflecting modest improvement in near-term sentiment despite prevailing caution.
Key technical levels for Nifty 50 include immediate resistance in the 25,950–26,000 zone, while crucial support is located in the 25,650–25,700 range. Derivatives data indicate heavy put writing at the 25,700 strike along with strong call writing at the 26,000 strike, establishing a near-term trading range. Bagadia recommends a selective buy-on-dips strategy as long as the Nifty holds above 25,600, with strict stop-losses at 25,500.
Bank Nifty Performance
The Bank Nifty experienced significant volatility, witnessing a sharp bearish move of nearly 450 points to an intraday low of 58,864. However, the index staged a strong rebound of approximately 676 points from lower levels, reflecting aggressive buying interest and clear defence of key support zones.
The RSI stands at 51.40 and is trending higher, suggesting strengthening momentum and a gradual shift in favour of bulls. Immediate resistance is placed in the 59,800–59,900 zone, while the 59,200–59,300 support band remains critical for maintaining near-term stability.
Five Breakout Stocks Recommendations
Bagadia has identified five breakout stocks that have moved past their established support or resistance levels, signaling potential for strong price movements:
| Stock | Current Price | Target | Stop Loss | Key Technical Factor |
|---|---|---|---|---|
| Fedbank Financial Services | ₹163.59 | ₹177.00 | ₹157.00 | Sharp breakout above consolidation zone |
| Asian Paints | ₹2,896.00 | ₹3,100.00 | ₹2,800.00 | Reclaimed ₹2,800 resistance zone |
| Nestle India | ₹1,312.00 | ₹1,400.00 | ₹1,270.00 | Consolidating after steady recovery |
| Alkem Laboratories | ₹5,867.00 | ₹6,300.00 | ₹5,656.00 | Breakout from falling channel pattern |
| Union Bank of India | ₹164.00 | ₹177.00 | ₹157.00 | Decisive breakout above recent resistance |
Detailed Stock Analysis
Fedbank Financial Services is demonstrating strong bullish trend characteristics, trading near ₹163.60 after breaking above its prior consolidation zone. The stock maintains position above all key EMAs with positive alignment, supported by improved volumes during the recent upward move.
Asian Paints shows renewed bullish momentum around ₹2,896 after reclaiming the ₹2,800 resistance zone. The stock trades comfortably above its 20, 50, and 100-day EMAs, with recent higher-high and higher-low structure reflecting strong buying interest.
Nestle India maintains positive trend characteristics near ₹1,312, consolidating after steady recovery. The stock holds above short- and medium-term EMAs with upward slope, indicating bullish structure with visible buying interest on minor dips.
Alkem Laboratories has resumed its uptrend around ₹5,867 after breaking out from a falling channel pattern. Trading above all major EMAs with 20-day EMA acting as immediate support, the breakout is supported by improving volumes.
Union Bank of India demonstrates strong uptrend characteristics near ₹164 following decisive breakout above recent resistance. The stock benefits from rising EMAs support, with higher highs and higher lows indicating trend continuation supported by expanding volumes.
Investment Strategy
The technical analysis suggests maintaining a bullish bias with buy-on-dips strategy near key support levels. All recommended stocks show strong technical patterns with proper risk management through appropriate stop-loss placements to guard against deeper downside risks. The market has demonstrated underlying strength despite short-term weakness, supporting the selective investment approach in quality breakout opportunities.
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