The Nifty 50 and Bank Nifty showed a smart recovery from the day’s low, closing in the green on January 22. The Nifty 50 defended 23,000 on a closing basis and, for another session, took support at the downward-sloping support trendline, although the overall trend remains negative. If the index holds this level, the 23,300-23,400 range could be a possible zone to watch on the higher side. However, falling decisively below this level could open doors for 22,800 and 22,600 levels. The strong recovery raised hopes for a further uptrend in the Bank Nifty, which, if it happens, could drive the index towards 49,000 and 49,500 levels. However, in the event of a correction, 48,500 may act as support, according to experts.

On Wednesday, January 22, the Nifty 50 closed at 23,155, up 131 points, while the Bank Nifty gained 154 points, closing at 48,724, with weak market breadth. A total of 1,914 shares declined compared to 635 shares that advanced on the NSE.

Nifty Outlook and Strategy

Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan

Nifty witnessed a sharp recovery from intraday lows and closed in the green. On the daily charts, we can observe that Nifty recovered from the psychological support level of 23,000. The recovery was led by HDFC Bank, which recovered sharply from intraday lows. Going ahead, we expect the recovery process to continue towards 23,400. Daily and hourly momentum indicators have shown a positive crossover, which is a buy signal. Thus, both price and momentum indicators point towards the continuation of the positive momentum that started on Wednesday. A breach below the support zone of 23,050 – 23,000 would lead to a decline towards 22,670. Overall, our bias tilts towards a pullback over the next few trading sessions.

Key Resistance: 23,200, 23,230

Key Support: 23,100, 23,050

Strategy: Buy Nifty Futures with a stop-loss of 23,000, targeting 23,300 - 23,400.

Vidnyan S Sawant, Head of Research at GEPL Capital

The Nifty formed an Outside Bar candlestick pattern on the weekly charts, reflecting heightened volatility. On the daily charts, the index is holding above the crucial 23,000 level on a closing basis. However, the overall trend remains weak, with immediate resistance levels at 23,500 and 23,850. The momentum indicator RSI (Relative Strength Index) is at 40, signaling a lack of strength. Additionally, the index's position below key moving averages on the weekly chart further emphasizes the prevailing weak trend.

Key Resistance: 23,500, 23,850

Key Support: 22,800, 22,500

Strategy: Sell Nifty Futures below 23,000, with a stop-loss of 23,250, targeting 22,500.

Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities

The overall trend of the Nifty remains weak, with the market currently trading within a broader range of 23,000-23,400. A decisive move above the 23,400 resistance level could trigger renewed buying interest. However, a drop below 22,975 may lead to further weakness, potentially pushing the index down to 22,800.

Key Resistance: 23,300, 23,400

Key Support: 23,100, 22,900

Strategy: Buy Nifty Futures on dips near 23,150, with a stop-loss below 23,000, targeting 23,400.

Bank Nifty - Outlook and Positioning

Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan

Bank Nifty has formed a Hammer candlestick pattern on the daily charts, and a follow-through buying momentum is expected to continue over the next few trading sessions. On the upside, immediate resistance is placed at 49,000, followed by 49,500, while support is placed at 48,200 – 48,100 levels. The momentum setup on both the daily and hourly time frames supports our outlook for a relief rally in the index.

Key Resistance: 49,000, 49,500

Key Support: 48,400, 48,300

Strategy: Buy Bank Nifty Futures with a stop-loss of 48,200, targeting 49,000 - 49,500.

Vidnyan S Sawant, Head of Research at GEPL Capital

Bank Nifty has formed a Doji candlestick over the past couple of weeks, accompanied by a higher top and higher bottom formation, suggesting the index is attempting to establish support near the 47,800 level. On the daily charts, the index shows signs of consolidation, moving within a range of 48,000 to 49,600 over the last seven sessions. However, the broader sentiment remains bearish, as the index trades below its six-month low and the 12-month EMA on the monthly chart, signaling a shift in trend from neutral to negative.

Key Resistance: 49,600, 50,800

Key Support: 47,800, 46,500

Strategy: Sell Bank Nifty Futures below 47,800, with a stop-loss of 48,250, targeting 46,500.

Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities

The Bank Nifty also witnessed a smart recovery from lower levels, with the index holding above the 48,000 mark. Technically, the index is trading in a volatile zone as the tug-of-war between bulls and bears keeps the index within a broader range. Although secondary oscillators suggest the index is in oversold territory, we can expect a technical bounce from hereon. However, the broader pattern remains weak for the index.

Key Resistance: 49,400, 49,800

Key Support: 48,500, 48,000

Strategy: Buy Bank Nifty Futures on dips near 48,500, with a stop-loss below 48,000, targeting 49,400.