Technical View: Nifty 50 started the week today, January 20, on a positive note. There was progress in this. Overall the index has remained in the range of 23,100-23,400 zone for the last five days. The upper level of this range is somewhat matching with the 50-week EMA and 10-day EMA. Therefore, a decisive close above 23,400 could open the doors to 23,570 (20-week EMA) and 200-day EMA (23,670) for the index. According to experts, till then consolidation in Nifty may continue with support at 23,100.
After initial fluctuations, Nifty gained strength. The index hit an intraday high of 23,391 in afternoon trade. The index closed the session with a gain of 142 points at 23,345. It formed a bullish candlestick pattern with a long lower shadow on the daily chart. This pattern is indicating buying at lower levels.
How could Nifty move on Tuesday 21st January?
Mandar Bhoane of Choice Broking “On the technical front, Nifty is consolidating near its important support zone of 23,400-23,100. Short-term bullish sentiment has strengthened with Monday’s close above 23,300,” it said.
According to him, a breakout above 23,400 could set the stage for a rally towards 23,600 and 23,800. However, a negative breakout below 23,100 could lead to a fall of the index towards 22,800 and 22,600.
Weekly derivatives data indicated that Nifty may be seen trading in the range of 23,000-24,000 levels. In this, immediate support is seen at 23,200 and resistance at 23,600 level.
Today dealers made bumper buying in two stocks of energy and finance sector, know how much both the stocks will rise.
How can Bank Nifty move on Tuesday 21st January?
Bank Nifty finally closed above 10-day EMA (49,274) for the first time since January 2. It increased by 810 points (1.67 percent) to reach 49,351. The index formed a bullish candlestick pattern on the daily chart with above average volume and higher high higher low formation.
Anshul Jain of Lakshmishree Investments That said, to sustain this rally and trigger short-covering, the banking index will have to sustain above 49,475 levels. If the index achieves this, the index may move towards 50,200 points. It is getting support from short-covering momentum.
According to him, on its downside, immediate support is seen at the level of 49,050. He said this setup highlights strong bullish sentiments. Possible breakout could be seen if index holds key levels
Meanwhile, the volatility index, India VIX, extended its upward move and rose 4.24 per cent to 16.42. This level is not a favorable zone for bulls. Therefore, bulls need to remain cautious.
(Disclaimer: The views and investment advice expressed on Moneycontrol.com are the personal views and opinions of investment experts. Moneycontrol advises users to consult certified experts before taking any investment decision.)