When markets rally, investors feel more confident. But when markets fall sharply, fear spreads faster than logic. Screens turn red, headlines get louder, and even experienced investors start to doubt. During these times, long-term opportunities take a shape.
History has shown us time and time again that the best investments are not usually made when you are comfortable. They are made when investors are uncomfortable.
And today, you can see that discomfort in some of India’s strongest bluechip stocks. Before we head to the stocks, let us first understand an oversold levels as per RSI.
Understanding RSI Oversold Zone
Relative Strength Index (RSI) is a momentum indicator that shows how fast and how much prices are changing. It goes back and forth between 0 and 100.
- Above 70: Overbought zone (the market might be getting tired on the upside)
- Below 30: Oversold zone (the price could go down even more)
If the RSI drops below 30 on a daily chart, it could mean a short-term bounce. But when RSI goes below 30 on a weekly chart, it shows deep, structural pessimism, which doesn’t happen very often.
There aren’t many oversold zones that last for a week. They usually show up:
- When the market crashes
- When a sector is performing really badly
- Or when strong businesses have to deal with short-term pain
And in the past, these phases have often lined up with long-term lows. But this is also where the risk-reward ratio starts to favour investors who are willing to hold for long-term.
1. HDFC Bank: When History Knocks Again
There are corrections, and then there are times in history that are very rare.
HDFC Bank’s stock price has dropped a lot since the merger, from about Rs.1,020 to Rs.770. The price isn’t the only thing that stands out; the weekly RSI is at 22.32.
This is only the third time in its history that it has been this oversold:
In each of the previous cases, the stock eventually built a long-term base during those times.
This doesn’t mean that things will change right away. But it does tell you something important are in a place where pessimism has been at its highest in the past.
And when a strong bank like HDFC Bank goes there, it needs to be watched, not feared.
2. TCS: When Leaders Don’t Speak
The IT industry has been under a lot of stress, and even TCS, which is its strongest part, hasn’t been able to avoid it. The weekly RSI is now at levels that haven’t been seen since the 2008 global financial crisis. This is only the second time in TCS history that the weekly RSI has been below 25 at the end of the week.
Take a moment to think about that. A company that has always been able to grow, stay stable, and be the best in the world is now trading in an extremely oversold zone that hasn’t been seen in almost 20 years.
Markets tend to go too far in both directions. And when leaders start to do poorly, it’s usually because of temporary changes in the story, not because of problems with the structure. If the stock price probably reverses, are you reacting to the price or taking advantage of an opportunity.
3. ITC: The Quiet Giant in Deeply Oversold Territory
There has always been a story of patience in ITC. Not the fastest mover but one of the most resilient businesses.
After the drop in January 2026, the stock’s weekly RSI fell to 17 and is now around 30.
There have only been three times in the history of the weekly RSI when it has dropped below 20:
Each of these phases showed extreme pessimism, not a permanent drop.
When a business like ITC that doesn’t change much and makes money enters such deep oversold territory, it usually means that long-term investors can safely buy more shares.
Are you willing to pay for stability when the market is scared or bored with it?
Fear vs. Opportunity
In the short term, markets are emotional, but in the long term, they are rational.
At this moment, the story is mostly about:
- Opportunities in Bluechips
- Poor performance in certain sectors
- Uncertainty around the world
But there is something important going on under all that noise is quality stocks are entering historically rare oversold areas. This doesn’t mean that prices can’t go down more. They can.
But it does mean that the probability of a long-term opportunity are getting better.
Add these stocks to your watchlist to see how they perform going ahead.
Disclaimer:
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Brijesh Bhatia is an Independent Research Analyst and is engaged in offering research and recommendation services with SEBI RA Number – INH000022075. He has two decades of experience in India’s financial markets as a trader and technical analyst.
Disclosure: The writer and his dependents do not hold the stocks discussed here.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives and resources, and only after consulting such independent advisors if necessary.
