- The technical outlook is that Nifty is rebounding

Options data indicated that the 23,000 level is expected to be a key zone for further direction of the Nifty 50. The index may remain in a broad range of 22,000-24,000 until the Budget day.

Nifty Trend

The Nifty 50 rebounded on January 28 after a couple of days of correction but remained volatile. A Doji formation on the daily charts signalled indecision among bulls and bears ahead of the Budget event. Experts expect higher volatility and a cautious stance as the market approaches the Budget, which is scheduled to be presented on February 1. If the index surpasses and sustains above 23,000, the possibility of an upward rally could emerge. However, as long as it trades below 23,000, consolidation may continue, with bears having the upper hand, experts said.

The Nifty 50, as expected, opened higher at 22,960 and traded in positive territory throughout the session. It touched an intraday high of 23,138 in late trade before closing the day at 22,957, up 128 points.

“Until the Nifty manages to sustain above 23,000 – 23,050, the downtrend is intact, and minor pullbacks to the resistance zone of 23,000 – 23,050 should be used as a selling opportunity,” said Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan.

The crucial support zone is placed at 22,780 – 22,670, according to him.

Options data indicated that the 23,000 level is expected to be a key zone for further direction of the Nifty 50. The index may remain in a broad range of 22,000-24,000 until the Budget day.

According to the monthly derivative data, the maximum call open interest was seen at the 24,000 strike, followed by the 23,000 and 23,500 strikes, with maximum call writing at the 23,700 strike, followed by the 23,650 and 22,950 strikes. On the put side, the 22,000 strike holds the maximum open interest, followed by the 23,000 and 22,500 strikes, with maximum put writing at the 23,000 strike, followed by the 22,900 and 22,000 strikes.

Bank Nifty

The Bank Nifty had a gap-up opening of more than 300 points and outperformed the Nifty 50, rising 802 points (1.67 percent) to 48,867 (with above-average volumes for another session). The index wiped out 380 points from the day’s high of 49,247 and formed a bullish candlestick pattern with a minor lower shadow and long upper wick on the daily timeframe. This indicates pressure at higher levels, though it closed above the 10-day EMA.

“A decisive move above 48,900 could trigger a second wave of short covering, propelling the index toward 49,600, the previous swing high. If this level is breached, the market structure flips bullish,” said Anshul Jain, Head of Research at Lakshmishree Investments.

He advised that traders should watch for sustained momentum above 48,900 as a buying opportunity, while failure to hold could reinforce the bearish trend.

Meanwhile, the India VIX, the volatility index, remained above the 18 level, rising 0.34 percent to 18.20 and sustaining above all key moving averages, signalling caution for bulls until the VIX falls below 14.

Disclaimer: Moneywealth research provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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