The Indian stock market traded in a narrow range on Monday with a cautious undertone, as tariff-related concerns and geopolitical uncertainties kept global investors on edge. Fresh threats from US President Donald Trump's tariffs on select European countries triggered a global risk-off mood, weighing on domestic sentiment. Persistent selling by foreign investors, along with continued weakness in the rupee against the dollar, added pressure on Indian equities.

Market Outlook and Technical Analysis

Sumeet Bagadia, Executive Director at Choice Broking, believes the Indian stock market sentiment remains weak. The technical expert maintains that as long as the Nifty 50 index closes above 25,500, a selective buy-on-dips strategy remains favorable, with a strict stop-loss at 25,150.

"The technical chart pattern indicates a weak intraday sentiment with selling pressure at higher levels. The index briefly crossed 26,600 but could not sustain the move due to a lack of follow-through buying," Bagadia explained.

Regarding Bank Nifty, Bagadia noted that intraday declines are being absorbed by buyers, keeping the broader trend constructive. He advised traders to remain selective, adopt a buy-on-dips approach near key support levels, and wait for a decisive breakout above resistance before initiating fresh directional positions.

Five Breakout Stock Recommendations

Bagadia has identified five shares showing strong technical patterns for intraday trading:

Banking and Financial Services

Bank of India shows strong bullish continuation on the daily chart after steady base formation, breaking out to fresh highs and confirming trend strength. The stock trades comfortably above the 20 and 50 EMA, both sloping upward, indicating strong short-term momentum.

Can Fin Home exhibits a strong bullish continuation pattern after consolidating above key moving averages. The stock trades above the 20, 50, and 100 EMA, all trending upward, confirming strength across timeframes with supportive volumes during rallies.

Technology and Healthcare

Thyrocare Technologies remains in a strong uptrend with higher highs and higher lows on the daily chart. The stock has successfully reclaimed the 20 and 50 EMA, while the 100 EMA continues trending upward, providing dynamic support with constructive volume behavior.

Industrial and Manufacturing

Ashok Leyland demonstrates a strong secular uptrend, marked by consistently higher highs and higher lows. The stock sustains above the 20 and 50 EMA, both sloping upward, with the 100 and 200 EMA providing a solid base to the ongoing trend.

CEAT shows trend resumption after a healthy consolidation phase, reclaiming the 20 and 50 EMA while the 100 EMA gradually turns upward. The price continues holding above the 200 EMA, supporting the long-term bullish structure.

Trading Recommendations Summary

All recommended stocks show strong technical patterns with price action above key moving averages and supportive volume behavior, making them suitable for intraday trading despite the cautious market environment.

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:

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:

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.