The Nifty 50 and Bank Nifty extended their downward journey for three consecutive days on January 10, trading below all key moving averages with a negative bias in momentum indicators. If the Nifty 50 breaks its Friday low of 23,350, the correction could extend to 23,263 (the November low), followed by 23,000. However, if it moves back above 23,600, sentiment could revive, and the index may move toward the 23,800-24,000 zone. Given the decisive breakdown of the support trendline, if the Bank Nifty breaks 48,500, the immediate downside target could be 48,000. But in the event of a bounce back, 49,500 is likely to act as a resistance on the higher side, experts said.

On Friday, January 10, the Nifty 50 closed at 23,432, down 95 points, while the Bank Nifty dropped 769 points to 48,734, with a negative market breadth. A total of 2,117 shares saw a correction, compared to 401 shares that gained on the NSE.

Nifty Outlook and Strategy

Rajesh Bhosale, Technical Analyst at Angel One

Last week’s decline pushed the Nifty below a key ascending trendline support on the weekly chart, which coincides with the 50-week EMA (Exponential Moving Average). Going forward, immediate support lies in the 23,200–23,100 range, aligning with the November swing low and the 61.8% retracement of the rally from the panic lows of June last year. A breach of this zone could confirm the first structural weekly lower-top-lower-bottom pattern, potentially signaling deeper market pain. On the upside, Friday’s attempted rebound faced selling pressure near 23,600, marking an immediate resistance level, followed by a stronger hurdle in the 23,750–23,800 zone.

Key Resistance: 23,600, 23,800

Key Support: 23,200, 23,000

Strategy: With around 15 trading sessions remaining before the key budget announcement, this period would traditionally present an opportunity to accumulate quality stocks in anticipation of a pre-budget rally. However, given the prevailing bearish scenario, we advise traders to avoid undue risk and be very selective when taking long positions.

Rajesh Palviya, Senior Vice President Research (Head Technical Derivatives) at Axis Securities

Nifty finished with a weekly loss of 573 points. On the weekly chart, Nifty formed a long bearish candle with a lower high and low compared to the previous week, signaling potential further weakness ahead. The index is approaching a critical medium-term support zone in the 23,263-23,000 range.

A sustained move above 23,600 could trigger buying activity, pushing the index toward 23,750-24,000. Conversely, a break below 23,200 may intensify selling pressure, potentially dragging the index down to 23,000-22,800. Nifty is expected to trade within the range of 24,000-22,800 for the week, maintaining a negative bias. The weekly Relative Strength Index (RSI) continues to trend downward and remains below its reference line, reinforcing the bearish outlook.

Key Resistance: 23,600, 23,750

Key Support: 23,300, 23,100

Strategy: Sell Nifty Futures at around 23,550, with a stop-loss of 23,650, targeting 23,300-23,150.

Ameya Ranadive, CMT, CFTe, Senior Technical Analyst at StoxBox

The overall trend remains bearish, as indicated by the negative bias in momentum indicators and the index trading below all its key moving averages. The ADX (Average Directional Index), which has risen from 18 to 32 on the negative side, highlights increasing bearish strength. Additionally, RSI has given a negative crossover and is now quoting at 37.77, further emphasizing weakening momentum.

Nifty is at a critical juncture, with minor support of around 23,350. A sustained break below this level could lead to a heavy sell-off, exposing the index to its 61.8% Fibonacci retracement level of 23,195, drawn from the June lows. Breaching this retracement level would confirm a shift toward complete bearishness. External factors, including rising US Treasury yields, crude oil prices, and a strengthening DXY, have further fueled the sell-off.

Key Resistance: 23,550, 23,690

Key Support: 23,350, 23,190

Strategy: Nifty remains a sell-on-rise opportunity. Fresh shorts can be initiated at the 23,650–23,700 levels for a target of 23,150. The bearish outlook will be invalidated if the index sustains above 23,900.

Bank Nifty - Outlook and Positioning

Rajesh Bhosale, Technical Analyst at Angel One

Bank Nifty’s convincing breakdown below its 200-DSMA at 50,750, and the breach of the prior swing low at 49,780 confirms a lower high-lower low formation, a textbook indicator of a well-established downtrend. The prior support zone around 49,700-49,800 is now expected to act as a strong resistance, with an immediate challenge emerging near Friday’s highs in the 49,350-49,480 zone. On the downside, pinpointing support levels is challenging in a swiftly declining market driven by strong bearish momentum. However, some support might emerge around 48,300-48,200, with a break below this level potentially paving the way for a retest of the lows from last year’s election result day.

Key Resistance: 49,500, 50,000

Key Support: 48,200, 48,000

Strategy: Participants are advised to use any bounces into resistance zones as opportunities to consider short positions.

Rajesh Palviya, Senior Vice President Research (Head Technical Derivatives) at Axis Securities

Bank Nifty finished the last week with a loss of 2,255 points. On the weekly chart, Bank Nifty formed a long bearish candle with a lower high-low pattern and closed below the previous week’s low, indicating weakness at current levels.

The index has breached the broader consolidation range of 54,000-49,700, which had been intact since mid-June 2024, signaling a breakdown and suggesting potential for further declines. A sustained move above 49,000 could generate buying momentum, propelling the index toward 49,500-50,000. Conversely, a drop below 48,500 may trigger selling pressure, pulling the index down toward 48,000-47,500.

For the week ahead, Bank Nifty is expected to trade within the range of 50,000-47,500, while maintaining a negative bias. Additionally, the weekly RSI remains in negative territory, below its reference line, further underscoring the bearish sentiment.

Key Resistance: 49,000, 49,500

Key Support: 48,500, 48,200

Strategy: Sell Bank Nifty Futures near 49,000 with a stop-loss of 49,300, targeting 48,400-48,200.

Ameya Ranadive, CMT, CFTe, Senior Technical Analyst at StoxBox

The sentiment remains decidedly bearish, underscored by a long bearish candlestick formation on daily charts and lower highs for six consecutive sessions. The index is also trading below all key moving averages (20, 50, 100, and 200-day EMAs), reinforcing the downward bias.

Momentum indicators suggest further weakness. RSI has reached oversold levels at 28.5, and ADX, now at 32, confirms strong bearish control. Additionally, options data shows maximum open interest at 46,000, marking it as a crucial support level, followed by 47,000. A breach below these levels could accelerate the decline.

Key Resistance: 49,656, 50,050

Key Support: 48,500, 48,150

Strategy: Bank Nifty remains a sell-on-rise candidate. Traders can initiate fresh shorts at 49,500–49,700 levels, targeting 48,500. The bearish view will be invalidated only if the index sustains above 49,900.