Trading Plan: Nifty 50 Eyes 25,900 Level, Bank Nifty Targets 59,700 Resistance
Nifty 50 and Bank Nifty staged sharp recoveries on January 12, with both indices forming bullish reversal patterns after significant intraday declines. Nifty 50 rose 0.42% to 25,790, targeting resistance at 25,900-26,000 levels, while Bank Nifty gained 0.34% to 59,451, facing immediate hurdle at 59,700. Technical indicators show improving momentum with positive crossovers and RSI above 50 levels. Despite rising India VIX at 11.37, experts recommend buy-on-dips strategies with well-defined support and resistance levels for both indices.
*this image is generated using AI for illustrative purposes only.
Market indices demonstrated resilience on January 12, staging sharp recoveries from intraday lows despite broader market weakness. The Nifty 50 and Bank Nifty both formed bullish reversal patterns, raising expectations for continued upward momentum in upcoming sessions.
Market Performance Overview
Both major indices showed strong recovery patterns during the trading session:
| Index | Closing Level | Daily Change | Percentage Change |
|---|---|---|---|
| Nifty 50 | 25,790 | +107 points | +0.42% |
| Bank Nifty | 59,451 | +199 points | +0.34% |
| India VIX | 11.37 | - | +4.05% |
Despite the index gains, market breadth remained unfavorable with 1,866 declining shares against 1,044 advancing shares on the NSE, indicating selective buying rather than broad-based recovery.
Nifty 50 Technical Outlook
The sharp recovery from day's low, coupled with a bullish reversal pattern formation after a five-day correction, has improved the technical outlook for Nifty 50. The index managed to close well above the critical 25,700 support level, indicating a potential short-term bottom.
Key Technical Levels:
| Level Type | Primary | Secondary |
|---|---|---|
| Resistance | 25,900-26,000 | 26,100-26,200 |
| Support | 25,700 | 25,450-25,500 |
Technical indicators show improving momentum with the DMI indicating a positive crossover and RSI moving above the 50 level on the 30-minute chart. The Nifty Put-Call Ratio stands at 0.88 after falling to 0.50 intraday, reflecting more balanced market positioning.
Trading Strategies:
- ICICI Securities: Buy Nifty Futures on dips in 25,650-25,700 range, stop-loss below 25,450, target 26,000-26,100
- Anand Rathi: Buy Nifty Futures in 25,800-25,700 zone, stop-loss 25,550, target 26,200
- SMC Global: Buy Nifty Futures on dips near 25,750, stop-loss below 25,500, target 26,150
Bank Nifty Analysis
Bank Nifty demonstrated strong recovery, rebounding over 600 points from intraday lows to settle near 59,450. The index found crucial support in the 58,800-58,900 zone, which coincides with previous demand areas and key technical levels.
Critical Levels for Bank Nifty:
| Parameter | Immediate | Extended |
|---|---|---|
| Resistance | 59,700-59,800 | 60,000-60,300 |
| Support | 59,000-59,200 | 58,700-58,900 |
The index has decisively reclaimed its 35-day exponential moving average on the daily chart, keeping the broader trend constructive. Technical indicators mirror the positive momentum seen in Nifty 50, with DMI showing positive crossover and RSI above 50 levels.
Expert Recommendations:
- ICICI Securities: Buy Bank Nifty Futures on dips near 59,300, stop-loss 58,900, target 59,700-60,000
- Anand Rathi: Buy Bank Nifty Futures in 59,600-59,500 zone, stop-loss 59,100, target 60,300
- SMC Global: Buy Bank Nifty Futures on dips near 59,400, stop-loss below 59,100, target 59,900
Volatility and Market Sentiment
India VIX closed 4.05% higher at 11.37, moving toward its short-term target of 12. The volatility index is expected to see further upside until Budget Day, potentially testing the 13 level. This elevated volatility suggests continued market uncertainty despite the technical recovery.
Market sentiment improved following encouraging remarks on potential trade deals by the US Ambassador, contributing to the afternoon recovery. However, analysts recommend a buy-on-dips and sell-on-rallies strategy until there is a clear breakout from current ranges.
Trading Strategy Summary
Experts unanimously favor a cautious bullish approach with specific entry and exit points. The consensus suggests that Nifty 50 needs to sustain above 25,700 to maintain bullish momentum, while Bank Nifty requires a close above 59,000 for continued strength. Both indices face immediate resistance zones that could determine the next directional move, making precise risk management crucial for traders.
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