NIFTY OUTLOOK FOR 23 JANUARY 2025

Indian equity indices ended on a positive note today, with the Nifty closing above the 23,150 mark. The Sensex gained 566.63 points (0.75%) to settle at 76,404.99, while the Nifty rose 130.70 points (0.57%) to close at 23,155.35. This marked a recovery from intraday lows, despite heightened market volatility.

Key Highlights:

• Sectoral Performance:

  • The IT index surged over 2%, leading the gains.

  • The Realty index suffered a sharp correction, declining more than 4.5%.

• Support and Resistance Levels:

  • The market found support near 23,000 (Nifty) and 75,850 (Sensex), triggering a sharp bounce back.

  • Resistance levels for the Nifty are seen at 23,250-23,325, while support lies at 23,000. A breach below 23,000 could lead to further declines towards 22,900-22,880.

• Technical Indicators:

  • Positive crossover in daily and hourly momentum indicators suggests continued positive momentum.

  • A decisive move above 23,400 may attract renewed buying interest, whereas a fall below 22,975 could exacerbate weakness.

Market Behavior:

After opening on a positive note, the market attempted further upward movement early in the session. However, mid-session witnessed intraday weakness before recovering sharply from the day’s lows. A small positive candle with a lower shadow formed on the daily chart, signaling a potential upside bounce.

Stock-Specific Trends:

• HDFC Bank: Led the recovery, rebounding sharply from intraday lows.

• Mid and Small-Caps: Underperformed due to valuation concerns.

Broader Market Analysis:

• Despite gains in the benchmarks, overall market breadth deteriorated, with broad market indices closing sharply lower.

• The negative chart pattern of lower tops and bottoms remains intact, reflecting a weak underlying trend.

• Volatility remains high amidst mixed sectoral performances.

Global Cues:

• News of potential lower US tariffs on China could provide temporary relief.

• A moderation in the dollar index might help stabilize the rupee.

Outlook:

• Positive Momentum: If the Nifty sustains above 23,000, the recovery process could extend towards 23,400 in the coming sessions.

• Risk Factors: A breach below 23,000 may lead to further declines, with 22,670 being the next critical support level.

Investors are advised to monitor key levels and adopt a cautious approach amidst ongoing market volatility. While the short-term trend appears weak, momentum indicators suggest a potential pullback.