The NIFTY’s short-term outlook, encompassing today and the coming days, hinges on a critical support zone located between 23400 and 23500 on the spot market.  A decisive break below this zone on a closing basis would open the door for a measured decline towards 23100.  Looking ahead, we anticipate heightened market volatility beginning around February 13th.  This expectation stems from significant cycle dates falling on February 14th, 18th, 19th, and 20th.  However, provided this support level remains intact, the NIFTY is expected to maintain its stability.

“The next 2-3 sessions for NIFTY will be extremely critical, as flagged off in Wednesday’s post. Resistance for NIFTY spot is at 23,500, and we are almost reaching it today. Any price between 23,500 and 23,700 would be an ideal opportunity to capitalize on fresh short trades, with initial target objectives of 22,800. The budget is a key event risk, but our cycle studies point towards further lower lows going forward. Similarly, Nifty Bank is nearing a critical resistance zone between 49,700 and 50,300 in cash terms. An inability to breach this resistance could trigger a 5-7% decline in the near term.”

“With the Union Budget on the horizon, it’s time to question our bearish narrative, which has guided our market analysis since late September.”

“Indian markets are about to head towards a very important event: the Union Budget. So, it’s an ideal time to review our approach, or rather, I should say it’s time to relook at our bearish approach, which we have been carrying since late September.”

“Our bearish outlook remains intact as the NIFTY spot has yet to reach our projected downside target of 21700. We will continue to capitalize on rallies by shorting, aiming to solidify our bearish position.

To optimize our strategy, we have two options:

1 Reduce trading activity: Minimize market participation while maintaining our short bias.

2 Await a rally to 23500: Utilize a potential rally as an opportunity to establish new short positions.

Our overarching objective is to maintain a short-selling bias until our projected downside target is achieved.”

The NIFTY index currently faces resistance at 23,500. Support for the index lies within a critical band ranging from 22,800 to 22,600. A decisive break below this support band could trigger a sharp decline, potentially leading to a significant market correction on immidiate basis.

As previously noted, with the India VIX exceeding 17, a sustained unidirectional move in either direction appears unlikely. Historically, elevated volatility levels often precede a decline in asset values.

On TIME front Even without considering the Union Budget, the 3rd and 4th of February are significant cyclical dates for the NIFTY index. These dates are likely to witness heightened volatility in the market.

Regarding the time projection for a potential test of the 21700 level, I anticipate this occurring by March 8th. However, there’s a notable possibility that this level could be reached as early as February 19th. This date holds significance as it marks the 144th day since the NIFTY’s September 27th high.

The Union Budget is certainly a significant event for the Indian markets, but it’s not the only factor driving market dynamics today. The concurrent Federal Open Market Committee (FOMC) meeting and the impending January series monthly expiry tomorrow are likely to significantly elevate excitement levels among market participants.”

“In conclusion, the NIFTY index is poised for a period of heightened volatility. By closely monitoring key resistance and support levels, and remaining cognizant of both domestic and global events, investors can navigate this dynamic market environment more effectively.”

“NIFTY major support positionally stands at 22,600-22,700 on spot. Until this zone gets tested, the setup remains of selling on rise.”

NIFTY broke below its significant support of 23,000 yesterday. However, the decline appears to be temporary for now. A sustained trade below 23,000 on the spot market is likely to drag prices towards the zone of 22,400 to 22,600 in the near term. With India VIX above 17, a one-way decline is unlikely. Markets are likely to head lower, but in a volatile manner. NIFTY is currently trading well below its resistance. As noted multiple times, volatility is likely to remain high until January 24th. Therefore, stay nimble with your trades. It is better to avoid careless trading. From here on out, it would be ideal to operate at lower volumes.”

https://ganninsides.com/2025/01/15/nifty-navigates-choppy-waters-support-holds-but-risks-remain/

“NIFTY, as discussed in the 15th January post, 23,000 is a strong support and holding that. There is a short-term probability of a rebound towards the zone of 23,550 to 23,700, which is the resistance zone.

However, this shall only be a temporary respite; the medium-term trend remains firmly bearish. So, post this rebound, expect further lower lows.

On the time front, until 24th January, vibrations are likely to stay on the higher side, so it’s better to be watchful.”

“Expect significant market declines, impacting both India and U.S. markets, potentially starting on Tuesday due to the U.S. market holiday on Monday. The period from January 17th to 24th will likely be characterized by high volatility. Pay close attention to Tuesday and Friday, January 24th, as particularly critical dates. Friday, January 24th, is a price and time squaring date for the S&P 500, which could lead to interesting market movements. Exercise caution and consider short positions.”

“Should Nifty breach the 23,000 level, the next significant support zone may lie around 22,600 on the spot market.”

“A potential Bank of Japan rate hike next Friday could trigger significant market volatility. This unexpected move would likely reverberate across global markets, demanding close attention and a reassessment of investment strategies.”