Markets turn cautious as Nifty slips into bearish zone; Oil India a buy, go short on L&T: Vinay Rajani

Speaking to ET Now, Rajani said the recent trading holiday announced on Thursday due to Maharashtra BMC elections has not materially altered the market structure. Instead, the current volatility reflects a deeper shift in the primary trend after the benchmark indices corrected sharply from record highs.

“The market has fallen nearly 900 points from the all-time high of 26,373, which has shaken bullish confidence,” Rajani said. He noted that recent pullbacks are struggling to sustain above key technical resistance levels, indicating continued dominance of bears.

From a technical perspective, the Nifty is facing strong resistance near its 50-day exponential moving average (EMA) around 25,900, while the 20-day EMA is placed close to 26,000. “These levels must be decisively taken out for any meaningful bullish reversal. Until then, traders should remain cautious and lighten positions at higher levels,” he added.

Rajani pointed out that the index’s recent low near 25,473 remains a crucial support. A breach below this level could further reinforce the bearish bias. While the earnings season may drive stock- and sector-specific moves, overall sentiment remains fragile, he said.

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Stock calls: Oil India buy, L&T short

Amid the broader market weakness, Rajani highlighted selective opportunities on both the long and short sides. He said rising crude oil prices are lending support to oil exploration stocks, which are showing technical breakouts.
Oil India appears technically strong, according to Rajani. “Oil India has seen a clear breakout. One can consider going long around ₹440–442, with a stop loss at ₹430. On the upside, the stock could move towards ₹460 over the next couple of sessions,” he said.On the flip side, he remains cautious on capital goods and infrastructure stocks, which are showing signs of weakness on charts. Rajani recommended a short position in Larsen & Toubro, citing a fresh technical breakdown.

“L&T January futures can be shorted around ₹3,925, with a stop loss at ₹3,975 and a downside target of ₹3,850,” he said.

Overall, Rajani advised traders to prioritise risk management, reduce aggressive exposures, and adopt a selective approach until the market shows signs of regaining strength above key resistance zones.