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The Indian stock market, specifically the Nifty 50 index, exhibited positive momentum on Monday, January 20th, opening above Friday's high at approximately 23,300. While a brief dip below 23,200 occurred early in the session, buying pressure quickly reversed the trend, leading to a steady climb and a close near the day's high. This upward movement was fueled primarily by gains in the financial sector. The index's performance reflects a period of consolidation and base formation around the 23,150-23,200 zone, suggesting a building impetus for further growth. The Nifty 50 ultimately surged by 142 points, closing at 23,345. This positive performance was further supported by robust global cues, especially in anticipation of Donald Trump's return to a key leadership role in the US, and strong Q3 results from companies like Kotak Mahindra Bank and Wipro, which contributed significantly to the gains in both Nifty 50 and Nifty Bank indices.
The broader market also displayed impressive performance, outpacing the benchmark index. The Nifty Bank index rose nearly 2%, and the midcap index gained 1%. Kotak Mahindra Bank and HDFC Bank were key drivers of these gains. Adding to the positive sentiment, Vodafone Idea shares experienced a remarkable jump of over 9%, driven by reports suggesting a potential partial waiver of AGR (Adjusted Gross Revenue) dues. While Vodafone Idea clarified that no formal communication from the government regarding this matter had been received, the news sparked considerable investor optimism. The Indian rupee also strengthened against the US dollar, benefiting from the positive performance of domestic equities and strength in Asian currencies. Despite the positive trends, market participants remain cautiously optimistic, awaiting further cues from both domestic and global developments. The global focus is centered on US market reactions to President Trump's renewed role, while domestically, corporate earnings and the upcoming budget are key areas of interest. Post-market hours on Monday, companies like Dixon Technologies, L&T Finance, and MCX reported their results, creating anticipation for further market reactions.
The day also saw several significant corporate announcements. Laxmi Dental shares made a strong debut on the bourses, listing at a premium of 23% on BSE and 26.64% on NSE. The IPO’s strong subscription further bolstered investor confidence. Looking ahead, analysts anticipate a period of range-bound trading, with stock- and sector-specific movements dominating as the Q3 earnings season gathers momentum. Several analysts have offered their perspectives on the immediate future of the Nifty 50 index. Om Mehra of SAMCO Securities highlighted the 23,400 resistance zone, suggesting that a breakout above this level could trigger a rally towards 23,550-23,570. Rupak De of LKP Securities noted the Nifty's volatility before closing at a six-day high, interpreting this as a positive sentiment shift and predicting a potential short-term rise towards 23,450, with a further rally to 23,800/24,000 if this level is decisively broken. Support at the lower end is identified at 23,150.
Rajesh Bhosale of Angel One echoed similar sentiments, emphasizing the 23,400 resistance level. He explained that breaking through this barrier could extend the rally to 23,700-23,750. However, he cautioned that a definitive shift in the broader trend would require surpassing major moving averages and breaching the descending trendline resistance near 24,000. Immediate support is placed around 23,150, with stronger support in the 23,000-22,900 zone, coinciding with a falling wedge pattern. The Nifty Bank index also closed strongly, at 49,350.80, marking a gain of 1.67%. While a minor resistance is anticipated around 50,000, a decisive breakthrough could signal sustained upward momentum. The index's reclaiming of its position above the 9 EMA and the rebounding daily RSI from lower levels point towards improving momentum. The support level has also shifted higher to 48,900, further strengthening the bullish outlook. In conclusion, the Indian stock market showed significant signs of positive momentum, supported by strong corporate earnings, positive global cues, and positive news affecting specific companies. Analysts are cautiously optimistic, predicting further gains, although the market remains sensitive to both domestic and global events.
Source: Trade Setup for January 21: Nifty breakout above this level could pave the way for a move to 24,000