Technical View: Bulls may drive Nifty towards 23,500 but sustaining there remains key for upward journey, Bank Nifty above 49,000

Nifty Uptrend

The Nifty 50 maintained its upward momentum on January 16, continuing its counter-trend pullback despite volatility. The movement was supported by gains in banking and financial services, as well as oil and gas stocks. The index extended its higher highs and higher lows pattern for another session, breaking its recent range by surpassing the 23,350 level intraday. This breakout raises the possibility of the upward rally continuing towards 23,500, followed by the 20-day and 200-day exponential moving averages (EMA) at 23,630–23,680. In case of a correction, experts suggest the index may find support around 23,150, followed by 23,050.

After opening higher at 23,377, the Nifty 50 hit an intraday high of 23,392 and a low of 23,272 before closing at 23,312, up 99 points. However, it formed a bearish candlestick pattern on the daily charts as the closing level was below the opening level.

"The range of the previous three trading sessions has broken on the upside, indicating that the bounce is likely to continue towards 23,500–25,630," said Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan.

According to Gedia, the hourly momentum indicator has shown a positive crossover, signaling a buy and suggesting that the counter-trend pullback may continue. On the downside, the crucial support zone is at 23,160–23,140, he added.

Monthly options data suggests that the Nifty may trade within the range of 23,000–24,000 in the short term, with immediate support and resistance levels at 23,000 and 23,500, respectively.

On the call side, the maximum open interest was observed at the 24,000 strike, followed by the 24,500, 23,800, and 23,500 strikes. Maximum writing was seen at the 23,400 strike, followed by the 23,300 and 23,350 strikes. On the put side, the 23,000 strike holds the maximum open interest, followed by the 22,500 and 24,000 strikes, with maximum writing at the 23,400, 23,300, and 23,000 strikes.

Bank Nifty

The Bank Nifty extended its gains for the third consecutive session and moved closer to 49,500 mark intraday. The index rose 527 points (1.08 percent) to finish at 49,279, sustaining a higher tops-higher bottoms formation since its seven-month low on January 13, indicating short-term positivity. Intraday, the Bank Nifty touched its 10-day EMA of 49,416. If it sustains above this level, the next target is the 20-day EMA at 50,150.

"Bank Nifty has inched closer to the crucial resistance zone of 49,500–49,600, which is expected to act as a significant hurdle in the short term," said Anshul Jain, Head of Research at Lakshmishree Investments.

Jain recommended a buy-on-dips strategy, suggesting the 49,100 zone as an ideal entry point for potential upside. "With improving sentiment and technical strength, any corrective moves should be seen as an opportunity to accumulate, aiming for a breakout above the resistance zone," he advised.

Meanwhile, the India VIX, the volatility index, remained in the higher zone at close, although it dipped intraday to the lower zone. It increased by 1.36 percent to 15.47, which is unfavourable for bulls.

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