Nifty50 could see one final volatile phase during January’s expiry week before a meaningful bounce back. Key levels and market insights inside.
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Table of Contents
Introduction: Navigating Nifty’s Volatility
As the January expiry week unfolds, the Nifty50 index may experience a final bout of volatility before staging a potential recovery, according to Rahul Sharma, an analyst at JM Financial. This period is expected to set the tone for the market trend in the coming month.
Key Support and Resistance Levels to Watch
Sharma identified critical levels for the Nifty50:
- Immediate support: 23,000
- Key lower levels: 22,700–22,800
- Turnaround resistance: 23,425
These levels indicate possible market behavior and provide traders with actionable benchmarks to strategize their positions.
Earnings Season Insights
The December quarter earnings have offered a positive backdrop:
- Median sales growth: 1.28%
- Earnings per share (EPS) growth: 0.1%
This performance has tempered some bearish sentiment, adding cautious optimism to market dynamics.
FIIs and Market Sentiment
Foreign Institutional Investors (FIIs) have shown mixed activity, which reflects easing bearish sentiment:
- FIIs reduced index futures positions from 3.5 lakh to 3.09 lakh contracts over the past three days.
- Aside from significant selling on Tuesday (₹5,458 crore), FIIs have generally been net buyers in stock futures, albeit in smaller volumes.
These trends suggest that FIIs are starting to shift gears, signaling potential market stabilization.
Stocks to Watch: Thrust Picks by JM Financial
- Britannia Industries (5101): Bullish setup with targets of 5300/5400.
- Cipla (1411): Bearish daily chart pattern with targets of 1365/1320 and a stop loss at 1458.
These stocks offer tactical opportunities for traders with varying risk appetites.
Market Sentiment and Nifty’s Performance
The Indian stock market faced selling pressure on Friday, ending in the red due to:
- Concerns about slowing corporate earnings.
- Declines in pharma, real estate, and auto stocks.
The Nifty50 index experienced volatile swings, closing near the session’s low at 23,092.20.
Technical Analysis: Bearish Bias Prevails
Rupak De, Senior Technical Analyst at LKP Securities, noted:
- The Nifty faces significant selling pressure near the 23,350–23,450 zone.
- The 23,000 level remains a critical support; breaching this could amplify bearish momentum.
- On the upside, the index needs to surpass 23,450 to shift sentiment positively.
Conclusion: What Lies Ahead for Nifty?
As the market approaches the January expiry, traders should brace for volatility while keeping an eye on key levels. A break above 23,450 could pave the way for recovery, while a breach of 23,000 may trigger further downside.
