NIFTY TECHNICAL OUTLOOK

 Based on Market Closing on Monday, January 06, 2025

The Nifty ended at 23,616.05, registering a decline of 388.70 points (-1.62%). The downtrend is expected to persist if the index falls below the critical support level of 23,500.

The session began on a positive note with the Nifty opening at 24,045.80 and briefly touching an intraday high of 24,089.90. However, sharp selling pressure dragged the index to an intraday low of 23,551.90 before closing lower. All sectors ended negatively, with PSU banks, realty, metal, media, and the auto sector witnessing the steepest losses. Market breadth reflected bearish sentiment, with 308 stocks advancing, 2,422 declining, and 110 remaining unchanged. Top gainers included APOLLOHOSP, TATACONSUM, TITAN, and HCLTECH, while ITC, TATASTEEL, TRENT, and BPCL were among the major losers.

From a technical perspective, momentum indicators point to a continued negative trend, as the index closed below its short-term and long-term moving averages. Additionally, the formation of a long black candle on the daily chart signals a bearish bias, with the index closing significantly lower than the previous session. On the downside, the short-term support lies at 23,500, and if breached, the downtrend is likely to deepen. Conversely, a pullback rally could emerge if the support holds, with the nearest intraday resistance at 23,675.

 Key intraday levels to watch are 23,550, 23,450, and 23,350 for support, and 23,675, 23,780, and 23,900 for resistance.

 For positional trading, the support zone is 23,500–23,300, with resistance levels at 24,200–24,800.

In conclusion, the Nifty's current technical setup indicates a prevailing bearish sentiment, with the index facing significant resistance at higher levels and critical support at 23,500. While the broader market remains under pressure, the possibility of a pullback rally cannot be ruled out if the index manages to hold above its support zone. Traders should approach the market cautiously, keeping an eye on the key support and resistance levels. Positional investors may find opportunities once the index stabilizes, while intraday participants should focus on short-term trends to capitalize on market volatility. The overall outlook suggests that breaking below 23,500 could lead to further downside, whereas holding this level might spark a recovery in the near term.

Bank Nifty Technical Outlook

In the previous session, Bank Nifty closed at 49,922.00, registering a sharp decline of 1,066.80 points, reflecting a significant bearish trend. Technically, momentum indicators suggest continued negativity, with the index closing below both its short-term and long-term moving averages. Additionally, the formation of a long black candle on the daily chart, coupled with a close near the day’s low, reinforces the negative bias.

The Bank Nifty remains under bearish pressure, with critical support at 49,600. If this level fails to hold, the downtrend is likely to extend further. Conversely, a recovery above 50,150 could initiate a pullback rally, but sustained bullish momentum appears uncertain until the index decisively surpasses higher resistance levels.

For intraday trading, support levels are identified at 49,800, 49,500, and 49,200, while resistance is positioned at 50,150, 50,475, and 50,800.

Positional traders should monitor short-term support at 49,600–48,300, with resistance levels at 50,600–52,000.