Market Review January 10

Technical Report & Trade Possibilities for January 10, 2024

Market Overview:

The Nifty 50 struggled to maintain the 21,500 support level, facing multiple bearish attempts.

Bulls have consistently defended the support, leading to a rangebound trade scenario.

Immediate resistance lies at 21,750-21,850 levels, with potential bearish action if 21,500 is breached.

Previous Day's Performance (January 9, 2024):

Indices opened strongly but retraced gains in the last hour, settling with moderate gains.

BSE Sensex was up 31 points at 71,386, and Nifty 50 gained 32 points at 21,545.

Bearish candlestick pattern formed on daily charts due to lower closing than opening levels.

Technical Analysis:

Nagaraj Shetti from HDFC Securities notes a negative indication, signaling potential weakness around 21,750 levels.

Nifty 50 testing the 10-day EMA (21,565) frequently; a break below 21,500 could lead to more weakness.

Short-term trend remains weak, with selling pressure expected around 21,750-21,850 levels.

 Key Levels and Possible Scenarios:

 Kunal Shah suggests two possibilities: closing above 21,750 for bullish momentum or closing below 21,500 leading to additional selling pressure towards 21,200.

Market breadth slightly favours bulls with more advancing than declining shares on the NSE.

Options Data:

Maximum Call open interest at 21,700 strike (1.03 crore contracts) acts as a key resistance.

Meaningful Call writing at 22,100 strike; Call unwinding at 22,200 strike.

Maximum Put open interest at 21,000 strike (59.87 lakh contracts) serves as a key support area.

Meaningful Put writing at 21,200, 21,400, and 21,700 strikes.

Put Call Ratio (PCR):

PCR rose to 0.88 on January 9, indicating an increase in bullish sentiment, as traders bought more Call options than Puts.

Institutional Activity:

FIIs sold shares worth Rs 990.90 crore, while DIIs purchased Rs 104.23 crore on January 9.

Trade Recommendation:

Long Position: Consider a long position if Nifty closes above 21,750, targeting resistance at 21,850.

Short Position: A close below 21,500 may prompt a short position, with a potential target of 21,200.

Risk Management: Set stop-loss levels based on individual risk tolerance and market conditions.

Disclaimer :

This report is for informational purposes only and does not constitute financial advice. Trading involves risks, and individuals should conduct their own research or consult with a financial professional before making investment decisions.