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Trade Setup for Jan 24: 18,150 continues to remain a hurdle for the Nifty 50

Trade Setup for Jan 24: 18,150 continues to remain a hurdle for the Nifty 50

Trade Setup for Jan 24: 18,150 continues to remain a hurdle for the Nifty 50
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By Hormaz Fatakia  Jan 24, 2023 6:48:22 AM IST (Updated)

The last instance of the Nifty 50 managing to make an intraday high above 18,200 was on January 04, when it hit a high of 18,243.

There's good news and there's not-so-good news. The latter first - the Nifty 50 is still struggling to go past its key resistance level of 18,150 - 18,200 on the upside. It made multiple attempts to cross last Wednesday's high of 18,184, but has failed to do so.

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The last instance of the Nifty 50 managing to make an intraday high above 18,200 was on January 04, when it hit a high of 18,243.
So what is the good news? The fact that the index has not broken below 18,000 on the downside for four consecutive sessions.
Monday's session saw the market regain the losses of the last two trading sessions led by technology stocks and the HDFC twins. However, it failed to sustain at the day's high as certain index heavyweights gave up their intraday gains.
Today's session will also see the index move on earnings reactions to Axis Bank while India's largest passenger car maker Maruti Suzuki India will be reporting its quarterly results today.
Sandeep J Shah of Motilal Oswal Private Wealth Management told CNBC-TV18 on Monday that countries are anxiously seeking alternatives to China, including India, even as the market is currently trading sideways. He expects the market to slowly grind higher post the budget, provided it does not have any negative surprise. "However there could be some volatility in the near term. So I think investors should buy into any weakness post budget," he said.
What do the charts suggest for Dalal Street?
The index continues to consolidate in a narrow range and once again failed to surpass the crucial resistance zone of 18,180, according to Devarsh Vakil of HDFC Securities. The Nifty 50 has now formed a descending triangle pattern on the daily chart with multiple bottoms in the range of 17,750 - 17,180 on the downside. Breakout level of the triangle is at 18,180. "For a sustained directional move, Nifty has to breakout on the either side of the range on closing basis," he said.
The Nifty Bank index outperformed the benchmarks on Monday, not only gaining 300 points but closing above the crucial resistance zone of 42,700. Kunal Shah of LKP Securities says that the index has immediate support at levels of 42,400, while the upside hurdle now is at 43,000. He expects a sharp short covering move on the upside once the index breaks past that level.
Here are key things to know about the market ahead of the January 24 trading session:
SGX Nifty
On Tuesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — increased 81 points or 0.45 percent to 18,227.5, thereby pointing to a positive for the market.
Global Markets
Markets in the US began from where they left on Friday, adding another day of gains in anticipation of a slowdown in rate hikes from the Federal Reserve and a earnings-heavy week.
The Nasdaq gained another 2 percent, in addition to Friday's gains while the Dow Jones added another 250 points. The S&P 500 closed 1.2 percent higher.
Most markets in the Asia Pacific are closed on account of the Lunar New Year. Japanese benchmarks - the Nikkei 225 and the Topix are trading with gains of 1.2 percent and 0.9 percent higher respectively.
What to expect on Dalal Street
The short-term trend on the Nifty 50 still remains positive, according to Rupak De of LKP Securities. The Relative Strength Index is also in a bullish crossover and rising. He expects a directional move higher on a close above 18,200. Support on the downside is seen at 17,950.
While the index continues to trade in a range, Ruchit Jain of 5paisa.com advises traders to look at the PSUs, IT and banking names, as he expects good momentum in the Nifty Bank above levels of 43,000. "Thus, traders are advised to capitalise on stocks from these sectors for higher short-term gains," he said.
Key levels to watch out for
For tomorrow's weekly as well as monthly options expiry, since Thursday is a holiday, the 18,100 strike call of the Nifty 50 shed 15.3 lakh shares in Open Interest. At higher levels, the 18,700 call shed 16.35 lakh shares in Open Interest. The 18,300 call has seen addition of 21 lakh shares in Open Interest.
On the downside, the 18,100 put has added 32 lakh shares in Open Interest, followed by the 18,000 put, which added 26 lakh shares and the 17,900 put, which added 19.7 lakh shares.
The Nifty Put-Call Ratio has moved from 0.83 on Friday to 0.94 on Monday.
L&T Finance Holdings, Delta Corp and PVR continue to remain in the F&O ban period.
FII/DII activity
Short Covering (Increase in price and Decrease in Open Interest)
StocksCurrent OICMPPrice ChangeOI Change
Berger Paints28,45,700565.001.74%-43.37%
Petronet LNG48,81,000226.551.68%-43.33%
United Breweries5,41,6001,581.950.54%-43.28%
ICICI Prudential66,46,500474.000.71%-43.28%
Crompton Consumer24,30,000328.901.37%-42.80%
Long Unwinding (Decrease in price and Open Interest)
StocksCurrent OICMPPrice ChangeOI Change
DLF1,32,99,000565.00-0.08%-65.32%
Ramco Cements11,13,500226.55-2.92%-55.53%
Shree Cement71,0001,581.95-5.20%-54.86%
Dabur39,85,000474.00-0.53%-54.72%
Siemens6,39,650328.90-0.53%-53.37%
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