Technical View: Nifty 50 closed the session on a positive note today, January 14, with a gain of 0.4 percent. As expected, the index moved closer to 23,200-23,300 zone due to oversold conditions reflected in the Momentum Indicator (RSI). But this level could not be maintained on closing basis. Nifty formed a doji type of candlestick pattern. This pattern is indicating indecision between buyers and sellers. The index needs to climb above 23,350 and fill the downgap seen on January 13. Till then consolidation and bearish phase may continue with downside target of 23,000. However, if the index manages to fill the gap and remain above it, the 23,500-23,600 zone is worth keeping an eye on, say experts.
Nifty opened higher at 23,166. After this it remained in the positive zone throughout the session. This was partly due to short-covering and partly value buying. The index finally ended 90 points higher at 23,176.
How could Nifty move on Wednesday, January 15?
Nagaraj Shetty of HDFC Securities said, the negative chart pattern of lower tops and bottoms continues on the daily chart. Additionally the current top bounce could potentially open up another lower top formation in the short term.
Overall, according to Shetty, the near-term trend of Nifty remains weak. He expects this upside bounce to prove to be a selling opportunity around the 23,350 level. “Immediate support in Nifty is seen at the level of 23,050.”
Zomato, Jio Financial Services may be included in Nifty 50 in March, BPCL, Britannia Industries may be out.
According to option data, Nifty may remain in the range of 23,000-24,000 zone. In this, a decisive break on the range either above or below can give a strong direction to the index.
How can Bank Nifty move on Wednesday, January 15?
Bank Nifty was already in oversold condition. Today this banking index bounced back with a gain of 688 points (1.43%) and closed at 48,729. As expected, the index reached the 49,000 zone intraday. The index formed a bullish candlestick pattern with a small upper shadow on the daily timeframe. For the index to rally upwards, it needs to remain above 49,000. Meanwhile, the index is expected to take immediate support at 47,900 (January 13 low).
Banking index rejected lower high formation after eight sessions. After a sharp correction of about 3,500 points in the last few days, the rate sensitive index saw some relief rally. Chandan Tapadia of Motilal Oswal said, “It will have to hold above 48,500 zone to bounce towards 49,000 and then 49,500 levels. If the index remains below this, some further weakness may be seen towards 48,250 and then 48,000 zones.”
Meanwhile, correction was seen in India VIX, the fear index. It fell 3.3% to 15.47. But it remains well above 14 points. Due to which there is caution among the bulls.
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