The Nifty 50 displayed resilience by defending the crucial 21,500 mark, concluding the session with a notable uptick of a third of a percent on January 10. The index showcased a robust recovery, bouncing off the day’s lows and securing gains. Experts project a potential surge towards this week’s high, lingering around the 21,750-21,800 zone, underpinned by support levels at 21,500-21,450.
Opening lower at 21,529, the Nifty 50 sustained a range-bound movement within a 100-point range before staging a robust rally in the final trading hour, reaching a day’s high of 21,642. The index concluded the day with a 74-point gain at 21,619, crafting a bullish candlestick pattern on the daily charts, signifying substantial support-based buying at lower levels, marked by a long lower shadow.
Jatin Gedia, a technical research analyst at Sharekhan by BNP Paribas, highlighted the Nifty’s retention above the crucial support zone of 21,500 – 21,460. This zone encompasses a vital Fibonacci retracement level and the significant 20-day moving average at 21,489, attracting buying interest. Additionally, the hourly momentum indicator displayed a positive crossover, signaling a buy opportunity.
Gedia emphasized that both price action and momentum indicators forecast a continuation of the upward momentum. The initial hurdle is anticipated at 21,730 – 21,750, while immediate support rests at 21,520 – 21,500, he indicated.
Examining options data, the 21,800 strike exhibited the highest call open interest, trailed by the 22,000 and 21,700 strikes. Call writing was observed at the 21,800 and 22,000 strikes, whereas maximum put open interest was noticeable at the 21,500 and 21,000 strikes, with put writing evident at the 21,500 and 21,600 strikes.
This options data signifies an anticipated resistance zone for the Nifty 50 at 21,700-21,800, with a strong support level at 21,500.
Bank Nifty
The Bank Nifty encountered a substantial decline as anticipated, only to rally 350 points from its intraday low during the weekly F&O expiry, outlining a bullish candlestick pattern on the daily charts. Despite this recovery, the index marked three consecutive days of forming lower highs and lower lows. Experts suggest a robust uptrend may materialize only upon breaching the 48,000 mark convincingly.
Securing a pivotal support at 47,000, the Bank Nifty observed a surge, concluding 118 points higher at 47,361. However, Kunal Shah, senior technical & derivative analyst at LKP Securities, highlighted a persisting market sentiment favoring “sell on rise.”
Shah emphasized the immediate hurdle at 47,500, where substantial open interest is concentrated on the Call side. He suggested that to trigger short-covering and aim for the 48,000 mark, the index must surpass the 47,500 level convincingly on a closing basis.
Furthermore, the receding volatility supported bullish sentiment, as indicated by India VIX dropping 2.2 percent to 12.97 from 13.26 levels.
The market remains poised for potential moves, with traders eyeing key support and resistance levels for both Nifty 50 and Bank Nifty indices.