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Below the Quote on Post-market comment by Hardik Matalia,  Derivative Analyst, Choice Broking

On January 21, the Indian benchmark indices experienced sharp selling pressure following a gap-up opening. Unable to recover from the lower levels, the Nifty index ended near the 23,000 mark. The Sensex closed on a negative note, declining by 1235.08 points (1.60%) to settle at 75,838.36. Similarly, the Nifty fell by 320.10 points (1.37%) to close at 23,024.65.

On the daily chart, the Nifty index formed a strong bearish engulfing candle, reflecting significant selling pressure from higher levels following a gap-up opening. This pattern indicates the potential for continued bearish momentum, particularly if key support levels are breached. The index failed to sustain higher levels and closed near the 23,000 mark, signaling caution. A breakdown below this support could trigger extended selling pressure, potentially dragging the index toward the 22,800–22,500 range. On the upside, immediate resistance is seen at 23,300, followed by a critical hurdle near 23,500. A sustained close above these resistance levels would be essential to negate the prevailing bearish sentiment and confirm a bullish reversal. Given the heightened market volatility, traders are advised to remain cautious and implement strict stop-loss measures to protect their capital. Avoiding overnight long positions until the index decisively trades above the 23,500 mark is recommended to manage risks effectively in the current market environment.

On the sectoral front, all sectors witnessed selling pressure, with all closing in negative territory. Realty, Energy, PSU Banks, Financial Services, and Auto sectors experienced the highest selling, with declines ranging from 1.63% to 4.12%. The broader indices also reflected negative sentiment, with the Nifty Midcap 100 index declining by 2.31% and the Nifty Small Cap 100 index down by 2.28%.

The India VIX surged 3.90% to 17.0550, reflecting heightened market volatility and increased uncertainty among participants, signaling the potential for larger price swings in the near term. Open Interest (OI) data indicates the highest OI on the call side at the 23,200 and 23,300 strike prices, highlighting strong resistance levels. On the put side, OI is concentrated at the 23,000 and 22,800 strike prices, marking these as key support levels.

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