Anand Rathi outlines India index, stock strategies after Sensex, Nifty drop

Indian Indices See Weekly Decline

India's benchmark Sensex and Nifty indices each recorded a decline exceeding 2% for the week ending 23 October 2026. This market downturn occurred alongside an increase in crude oil prices.

Jigar Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, observed a technical correction in the Nifty following a rally of approximately 1,000 points the previous week.

Patel maintains a conditional bullish perspective on the indices, noting that the Nifty's hourly Relative Strength Index (RSI) crossed the 70 mark in August 2026 and has since remained above 40 despite the recent 700-point correction, indicating underlying momentum.

Nifty and Bank Nifty Outlook

Anand Rathi suggests a 'buy-on-dips' approach for the Nifty, provided the index closes daily above 22,200. A definitive close below this threshold would weaken the positive outlook, according to Patel. For the Bank Nifty, Patel's analysis shows a potential weakening of selling pressure, supported by an extended bottom formation and a bullish RSI divergence on the hourly chart.

The 54,000–53,800 range is crucial for sustaining a recovery. A move above 55,000 could lead to further gains towards 56,000, while a break below 53,800 would undermine the bullish view.

Paytm and Sapphire Foods Strategies

Patel recommends a 'sell' strategy for One 97 Communications (Paytm) shares, advising entry between ₹1,630 and ₹1,635, with a target price of ₹1,500 and a stop-loss at ₹1,690. This follows Paytm's breach of key support levels at ₹1,640 and ₹1,620, signalling a deteriorating price structure and intense selling pressure, as shown by the 2-hour and 3-hour RSIs falling below 30.

Conversely, Sapphire Foods is a 'buy' recommendation, with a target of ₹221 and a stop-loss at ₹180. The stock is trading near its previous demand zone of ₹185–₹190, where buying interest has emerged, and shows a bullish divergence on its daily RSI.

Larsen & Toubro and Investor Focus

Larsen & Toubro (L&T) presents a 'buy' opportunity, according to Anand Rathi, with a target price of ₹3,900 and a stop-loss at ₹3,550. The stock appears to be forming a base around the ₹3,600 level, which acts as a strong support zone, aligning with monthly Camarilla support and a prior demand area.

The RSI for L&T is positioned just above the oversold region, suggesting an easing of selling pressure. Sustaining above ₹3,600 could lead to a rebound. Investors in the Indian market will monitor these key support and resistance levels across the indices and individual stocks for potential trading signals this week.