The Indian stock market is likely to open in the red on January 27, following weakness in global markets. Trends on the Gift Nifty indicate that the benchmark indices will likely open in the gap-down space. The Gift Nifty was trading at 22,932 levels, nearly 180 points below the Nifty futures' previous close.
The Indian equities Friday ended in the red due to profit
taking. Sensex skidded 329.92 points, at 0.43% to close at 76,190.46 while
Nifty 50 declined 113.15 points, that is, 0.49% to close at 23,092.20.
Market View and Technical Analysis
Nifty 50 Performance:
Nifty 50 formed a small negative candle with a long upper
shadow in the daily chart. This suggested a rejection at lower highs. In continuation
of bearish pattern of lower tops and lower bottoms, it forms a latest lower top
around Friday's high at 23,347 levels.
HDFC Securities senior technical research analyst Nagaraj
Shetti said, "The short-term trend continues to be weak. A move below the
immediate support of 22,975 can lead further south to 22,800. Any bounce to
23,350-23,400 can be a selling opportunity.
Sensex Movement:
The Sensex has been on the selling side at higher levels. It
is giving a well-consolidated lower top pattern on the daily chart. According
to Amol Athawale, VP-Technical Research at Kotak Securities, levels of
77,000-77,300 will be important resistance, while 75,700-75,500 will act as
critical support.
Athawale said, if the market surpasses 77,300 level, then
there is a chance of upsurge until 77,800-78,000. If the index slips below
75,500 then it will again slip into the range of 75,200-74,700.
Bank Nifty Index
Friday ended at 48,367.80 by losing 221.20 points, or 0.46%.
The observed high-wave doji candle indicated a cautious situation.
Dr Praveen Dwarakanath, Vice President, Hedged.in, pointed
out that on an immediate resistance, the number stands at 49,500. Unless this
is crossed, it can be sold on each rise. In case of an upsurge in bearish
momentum, the downward fall will reach 47,500-47,200.
Amol Athawale commented that the cross of 49,000 will bounce to 49,500 and it will continue its upside till 50,000.
Weekly Trends and Key Levels
Resistance Levels:
Nifty 50: 23,350–23,450
Bank Nifty: 49,000–49,500
Sensex: 77,000–77,300
Support Levels:
Nifty 50: 22,975–22,800
Bank Nifty: 47,500–47,200
Sensex: 75,700–75,500
Analyst Recommendations
Nifty 50:
Rupak De, Senior Technical Analyst at LKP Securities says
that the index is still highly bearish. Any bounce toward 23,350–23,450 could
see selling pressures, while any downside may not be much deeper unless 23,000
levels are broken.
Bank Nifty:
Dr. Dwarakanath pointed out that momentum indicators are
over sold and a minor bounce may trigger. But again, it is a chance of fresh
selling on higher sides.
The overall market sentiment is bearish, and resistance
levels are key obstacles for a recovery. In this scenario, investors should
exercise caution and monitor support levels for potential opportunities.
Conclusion :
Indian stock market will open weak due to global cues and
domestic profit booking. The bearish pattern continues in all major indices.
Traders should keep a close eye on key levels and use the sell-on-rise
strategy.
Disclaimer :
The views expressed are those of individual
analysts or brokerage firms. Investors should consult certified experts before
making investment decisions.
