The Indian equity market ended largely in the red on Tuesday, though it managed to recover sharply from intraday lows. The Nifty 50 held above the crucial 25,700.00 mark despite sustained selling pressure through most of the session, closing at 25,732.00 with a decline of 57.00 points.

Market Performance and Trading Pattern

The Nifty demonstrated significant volatility during the trading session. The index opened 107.00 points higher and briefly tested its 50-day exponential moving average resistance near 25,891.00 before reversing course. Bears remained in control for the better part of the session, pushing the index down to an intraday low of 25,603.00.

A late rebound of more than 150.00 points in the final hour helped limit losses and pull the index off the day's lows, demonstrating resilience in the face of selling pressure.

Individual Stock and Sectoral Performance

In the Nifty basket, ONGC, Eternal, and ICICI Bank led gains, while Trent, Larsen & Toubro, and Dr Reddy's witnessed selling pressure to end as top losers. Sectoral performance presented a mixed picture across different segments.

The broader market indices showed divergent trends. The Nifty Midcap 100 index slipped 0.20%, but the Smallcap 100 index defied the overall trend with a 0.60% gain.

Upcoming Market Events

Market attention will shift to earnings reports from several major companies including:

• Infosys
• Groww Venture
• HDB Financial Services
• HDFC AMC
• ICICI Prudential AMC
• Indian Overseas Bank
• Waaree Renewables Technologies
• Union Bank of India
• Anand Rathi Share And Stock Brokers

Wednesday's trading session will also see the allotment of the ₹1,071.00 crore IPO of Bharat Coking Coal Ltd., a wholly-owned subsidiary of Coal India Ltd.

Technical Analysis and Expert Views

Nagaraj Shetti of HDFC Securities sees scope for an upside move from current levels, with the Nifty likely to overcome the 25,900.00–26,000.00 resistance zone in the coming sessions. He places immediate support at around 25,600.00.

Ajit Mishra of Religare Broking noted that markets remained volatile on the weekly expiry and ended marginally lower amid mixed cues. He observed that market movements continue to reflect a tug of war between earnings-driven reactions and global uncertainty. Religare Broking maintains a cautious stance on the Nifty and recommends a sell-on-rise strategy until the index decisively reclaims the 26,000.00 mark.

A clear break below the medium-term 100-day EMA near 25,600.00 could deepen the correction toward the 25,400.00 level. Nandish Shah of HDFC Securities emphasized that the Nifty needs to cross its 50-day EMA near 25,900.00 to regain momentum, while the recent swing low of 25,473.00 is expected to provide near-term support.

The Nifty 50 faced selling pressure on January 13, declining 58 points to close at 25,732 despite opening higher and testing the 25,900 resistance level. The index failed to attract follow-through buying interest and closed with above-average volumes, forming a long bearish candle with a long lower shadow on the daily chart.

Technical Analysis and Key Levels

The benchmark index continues to encounter significant resistance at the 25,900-26,000 zone, which technical analysts identify as a crucial hurdle for any sustained upward movement. Despite the decline, the index successfully defended the 100-day EMA for the third straight day and negated the lower high-lower low structure of the previous five sessions.

Momentum indicators present a mixed picture. The RSI stands at 41.16, sustaining below its signal line, while the MACD maintains a bearish crossover with a declining histogram. On the hourly chart, the index entered the momentum zone by rising above the midline of the Bollinger Bands, though it remained below short and medium-term moving averages on the daily timeframe.

Expert Analysis and Market Outlook

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted the emergence of buying interest near lower support levels as a positive signal. "The formation of a higher-bottom reversal pattern on the intraday (60-minute) chart indicates that the market could move up from here and surpass the hurdle of the 25,900–26,000 levels in the next few sessions," he stated.

Options Data and Market Sentiment

Weekly options data reinforces the significance of key levels, with maximum Call open interest positioned at the 26,000 strike, followed by 25,800 and 26,500 strikes. The data structure suggests:

• Call Writing Activity: Concentrated at 26,000, 25,800, and 25,900 strikes
• Put Open Interest: Maximum at 25,000 strike, followed by 25,700 and 25,500
• Put Writing: Focused at 25,000, 25,700, and 25,600 levels

Bank Nifty Performance

The Bank Nifty demonstrated relative strength, extending gains for the second consecutive session and closing 128 points higher at 59,579. The banking index successfully closed above the 20-day EMA and 20-day SMA, though it formed a bearish candle due to profit-booking at higher levels.

Vatsal Bhuva, Technical Analyst at LKP Securities, emphasized the importance of the 20-day SMA as strong support. "If the index sustains above the 20-day SMA for the next 2–3 sessions, a move towards 60,200 can be expected," he noted.

Volatility and Risk Factors

India VIX, the market's fear gauge, remained at elevated levels despite correcting 1.50% to close at 11.20. The elevated volatility index continues to signal caution for market participants, with experts expecting further rise to the 12-13 range ahead of the Union Budget. This elevated volatility environment suggests continued uncertainty and potential for sharp price movements in either direction.