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Technical Outlook
Day that was…
Indian equities concluded the monthly expiry session on a positive note to settle at 25,175 up 0.50%, tracking positive global cues. On broader markets, Nifty Midcap and Smallcap moved in tandem with benchmark and gained 0.50% each. Baring Auto and FMCG, all sectoral indices closed in green, wherein Metals and Banks were the top outperformers.
Technical Outlook:
* Nifty witnessed a volatile day and oscillated by ~1000 points range in today’s session. The daily price action formed a bullish candle with long lower and upper shadow, indicating elevated volatility.
* Key point to highlight is that index is missing a follow-through strength above its previous session high on closing basis since 5th Jan 2026, thereby a decisive close with a follow through strength above previous session high would confirm pause in current downward momentum and help index to gradually head towards previous swing high of 25,400.
* On the larger degree time frame, index has been respecting 20 months EMA which has been held post Covid-lows. The current reading is placed around 24300 that corroborates with August swing low of 24338, highlighting strong support going ahead.
* Among the momentum indicator, Stochastic oscillator in weekly timeframe is in oversold zone with a reading of 17, signifies possibility of temporary pause in downward movement cannot be ruled out. Therefore, we advise one should refrain from aggressive selling at current levels and instead, should adopt a selective accumulation approach, focusing on quality stocks delivering strong Q3 earnings.
* Going ahead markets are likely to witness heightened volatility in the coming week amid Pre-Budget positioning, US Fed policy and Q3 earning season as these are likely to dictate the trend for the final week of January.
On a market breadth perspective:
* On a market breadth front, historically whenever net of advance decline of Nifty 500 approached towards 450-470 levels that has been associated with capitulation and panic driven selling to form a short-term bottom.
* In last week net A/D of index has reached 440 level suggesting markets likely to form short-term bottom and see a gradual recovery in next couple of weeks
Key Monitorable:
a) Q3-FY26 earnings trajectory
b) India-EU Trade Deal
c) USDINR has clocked a fresh all-time high $91.74. Further rise in USDINR bodes negative for domestic market. Intraday Rational:
* Trend- Supportive efforts emerging around 200-day EMA
* Levels- Buy around 50% retracement of previous day upmove(25100-25430)
Technical Outlook
Day that was:
Bank Nifty ended the volatile day on positive note up 1.5% at 59205. Nifty PSU Bank relatively outperformed gaining 2%.
Technical Outlook:
* Amid heightened volatility, Bank Nifty staged a sharp fag-end rebound in the previous session. After opening on a weak note and trading in negative territory for most of the session, strong late-session buying propelled the index to erase losses and close with a robust gain. The daily price action formed bullish candle carrying lower shadow indicating buying demand at lower levels.
• Key point to highlight is that In line with our view Index rebounded after taking support at its long term trendline joining lows of March and October 2025 coinciding with 20- week EMA indicating strong support in near term.
* We believe, follow through strength above todays high (59437) would trigger further upsides towards 60000 levels. On the downside strong support is placed at 58100 being 100-day EMA.
* Going ahead, Volatility will remain elevated ahead of key event like pre-budget and FOMC meet that will dictate market direction for coming week.
* Nifty PSU Bank Index formed Inside bar candle above 20-day EMA, indicating elevated buying demand. We expect Index to challenge 9100 and head toward 9300 levels in coming weeks
Intraday Rational:
* Trend – Supportiv
Supportive efforts from rising trendline coinciding with 100-day EMA
• Levels -
Buy around 50% retracement of previous day upmove
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