The Nifty squandered the day’s gains in the last couple of hours to end lower on January 20, as the market opened on a Saturday.
The index started positive but selling in the last hours pushed the Nifty to the day's low of 21,542. The index ended off the day’s low but was still down 51 points at 21,572. It formed a bearish candlestick on the daily chart.
"The overall consolidation phase may persist for the next few days or until the Nifty stays within the range of 21,500-21,700. Only a decisive breakout on either side could initiate a directional move," Rupak De, senior technical analyst, LKP Securities said.
For the week, it formed a Bearish Engulfing pattern as it ended the week 1.5 percent lower.
De said a significant decline below 21,500 can trigger a correction towards 21,300 and lower. "Conversely, a robust breakout above 21,700 is needed for a resumption of the uptrend," he said.
Shitij Gandhi, senior technical research analyst at SMC Global Securities, too, expects consolidation along with some wild intraday moves.
Trading volumes remained low. The market will be closed on January 22, as the Maharashtra government has declared a public holiday and the Centre a half day for the inauguration of the Ram temple in Ayodhya.
The options data also suggests that 21,700 will be the key hurdle and 21,500 immediate support.
The maximum Call open interest was seen at 22,500 strike followed by 22,000 strike and 21,700 strike, with Call writing at 21,700 strike then 22,400 strike and 21,900 strike.
On the Put front, the 20,500 strike has the maximum open interest followed by 21,000 strike and 21,500 strike, with writing at 21,000 strike, then 21,100 strike.
Bank Nifty
Bank Nifty outperformed the Nifty to close 357 points higher at 46,058. It formed a small-bodied bullish candlestick with a long lower shadow on the daily chart.
"The Bank Nifty index displayed resilience by forming a higher low on the daily chart while maintaining the immediate support zone of 45,700-45,600," Kunal Shah, senior technical & derivative analyst at LKP Securities said.
To resume the uptrend, the index needs to overcome the immediate resistance at 46,300. A breakthrough can trigger short-covering, propelling Bank Nifty to 46,500, 46,800.
A close below the crucial support of 45,600 can lead to a correction towards 44,000.
For the week, the index lost 3.5 percent largely due to the selling in heavyweight HDFC Bank and formed a long bearish candlestick on the weekly scale.
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