The Indian stock market witnessed a significant downturn on Friday, January 23, with both major indices closing in negative territory. This decline followed a session of decent gains, as investors engaged in profit booking amid ongoing geopolitical tensions that continue to cloud market sentiment.
Market Performance Details
The benchmark Sensex experienced a sharp fall of 770 points, representing a decline of 0.94 percent, to settle at 81,537.70. Similarly, the Nifty 50 index dropped by 241 points, or 0.95 percent, closing at 25,048.65. This downward movement marked a reversal from the previous session's positive performance, highlighting the volatile nature of current market conditions.
Nifty 50 Technical Analysis
According to Sumeet Bagadia, Executive Director at Choice Broking, the Nifty 50 opened with a flat-to-positive bias and managed to reach an intraday high of 25,347.95. However, the index struggled to maintain these elevated levels, eventually breaching the crucial support zone around 25,100. It formed a low of 25,050 before settling at 25,048.65.
Bagadia noted that this price action clearly indicates selling pressure at higher levels and a noticeable absence of follow-through buying interest. The immediate resistance is positioned in the 25,200–25,250 range, while critical support lies between 24,900 and 24,950, he explained.
The daily Relative Strength Index (RSI) currently stands at 29.12 and continues to trend downward, reflecting oversold conditions and persistent weakness in momentum. Interestingly, the India VIX volatility index decreased by 6.31 percent to 14.19, suggesting some easing of market volatility and reduced near-term uncertainty.
Derivatives data reveals substantial call writing at the 25,300 strike price and significant put writing at the 25,000 strike, establishing this zone as a crucial near-term pivot point. Traders are advised to exercise caution around key support levels and await a decisive breakout above resistance before initiating new directional positions, Bagadia recommended.
Bank Nifty Performance and Outlook
The Bank Nifty index opened with a flat-to-positive note and recorded modest gains of approximately 146 points, reaching an intraday high of 59,400. However, the index encountered selling pressure at higher levels, slipping below the important psychological support of 59,000. It touched an intraday low of 58,823 before closing at 58,473.10, demonstrating persistent selling pressure throughout the trading session.
Bagadia interpreted this price action as indicative of a weak closing and continuation of short-term corrective pressure. Immediate resistance for Bank Nifty is situated in the 58,700–58,800 zone, while the crucial support band of 58,100–58,200 remains vital for maintaining near-term stability in the index, he added.
The daily RSI for Bank Nifty stands at 38.98 and is trending lower, signaling weakening momentum and a cautious near-term outlook. Similar to the broader market, traders are advised to adopt a careful approach near key support levels and wait for a decisive breakout above resistance before establishing fresh directional positions.
Stock Recommendations for Tuesday
Sumeet Bagadia has recommended three stocks for consideration on Tuesday, January 27:
- Asian Granito India: Buy at ₹69.15 with a target price of ₹76.50 and stop loss at ₹65.50
- IFCI: Buy at ₹56.35 with a target price of ₹62 and stop loss at ₹53.30
- MMTC: Buy at ₹63.83 with a target price of ₹70 and stop loss at ₹60.50
Disclaimer: This information is provided for educational purposes only. The views and recommendations expressed are those of individual analysts or broking companies and do not represent Mint. Investors are strongly advised to consult with certified experts before making any investment decisions.
