Sensex, Nifty trade setup: 11 things you should know ahead of Friday’s session

Indian equity benchmarks fell sharply on Wednesday, dragged by losses HDFC twins (HDFC and HDFC Bank), index heavyweight Reliance Industries, ICICI Bank and State Bank of India (SBI). The 30-share BSE Sensex pack slumped 774 points or 1.27 per cent to settle at 60,205, while the broader NSE Nifty index moved 226 points or 1.25 per cent down to close at 17,892. On the sectoral front, banks, financial and energy stocks took a beating today. Further, short-seller Hindenburg Research’s report on Adani Group companies pulled the indices lower. Hindenburg Research said it holds short positions in Adani-led firms and flagged financial risks of the companies. The domestic indices would be closed on Thursday to mark India’s 74th Republic Day, which meant the expiry of the January series derivatives was today.

“Indian equities witnessed significant sell-off as the market appeared apprehensive ahead of the upcoming Union Budget and Fed meeting next week. Sentiments were dampened by persistent FII selling, where funds are being shifted to other EMs as a result of attractive valuations. Furthermore, a weak economic growth outlook that stoked recession fears pulled down global markets,” said Vinod Nair, Head of Research at Geojit Financial Services.

Also Read | Sensex dives 773 pts, Nifty below 17,900; investors lose Rs 3.6 lakh crore; Adani stocks up to 8%

Here are 11 things you should know ahead of Friday’s session:

Nifty Outlook

“Bears remained at the helm as Nifty shed more than 200 points today. On the daily timeframe, the index remained below the 50-day exponential moving average. Besides, the index remained below the 50-day exponential moving average, which confirms the bearish trend.On the lower end, however, the correction was limited to the upper band of the falling wedge pattern on the daily chart.The sentiment looks very weak, with the RSI in a bearish crossover.However, a further correction may occur if the price falls below 17,840. On the higher end, resistance is placed at 18,000,” said Rupak De, Senior Technical Analyst at LKP Securities.

Nifty Bank Outlook

“Nifty Bank witnessed selling pressure throughout the session. On the daily chart, an upward consolidation was followed by a sharp correction, suggesting a rise in bearish bets in the space. Furthermore, the index has dropped below the 50-day exponential moving average, confirming the downward trend. On the lower end, immediate support is visible at 41,500/40,800. On the higher end, resistance is visible at 42,000,” said Kunal Shah, Senior Technical Analyst at LKP Securities.

Nifty, Nifty Bank Call-Put Open Interest (OI)

“On the call side of Nifty, the highest OI was observed at 18,000, followed by 18,100 strike, while on the put side, the highest OI was at 17,800 strike. On the other hand, Nifty Bank has support at 41,000-41,200, while resistance is placed at the 42,000-42,200 range. As markets continue to trade in a wide range with high volatility, we advise traders to keep booking profits on their trading positions,” said Om Mehra, Equity Research Analyst at Choice Broking.

Nifty Bank Tech Charts

“Nifty Bank opened negative and relentlessly fell throughout the session and touched an intraday low of 41,540 zones. It formed a strong Bearish candle on a daily scale and closed with massive losses of around 1,100 points. Now till it holds below 42,000 zones, weakness could be seen towards 41,500 and 41,250 zones, whereas hurdles are placed at 42,000 and 42,222 zones,” said Chandan Taparia of Motilal Oswal Securities.

Futures Data

“Nifty future closed negative with losses of 1.31 per cent at 17,890 levels. Positive setup in Persistent, Hindalco, Maruti, Hero MotoCorp, Bajaj Auto, ONGC, ITC and Apollo Tires, while weakness in Ambuja Cements, ACC, Indus Tower, Adani Ports , United Spirits, Biocon, Indusind Bank, SBI, Concor, Aurobindo Pharma, Canara Bank, Bank of Baroda, SBI Card, Aarti Industries, DLF, Glenmark, Dixon, Voltas, Cipla, Dr Lal Path Labs and Axis Bank,” Taparia said .

European Stocks

European stock indices such as the German DAX, Euro Stoxx 50, Spain’s IBEX 35 and France’s CAC were seen trading lower. Further, US stock futures indicated a gap-down start for Wall Street.

Most Active Stocks

Zomato, Yes Bank, Vodafone Idea, PNB, South Indian Bank, Suzlon, Tata Steel, Nykaa, Bank of Baroda and UCO Bank were the most active stocks on NSE, in terms of volume.

oil prices

Oil slipped today, adding to a decline in the previous session. However, crude has rallied in 2023, with global benchmark Brent crude topping $89 a barrel this week for the first time since early December. Higher oil prices hurt oil-importing countries like India, where crude constitutes the bulk of the country’s import bill.

52-Week High/Low

113 stocks touched their respective 52-week high today on BSE, while 109 hit their one-year lows. BSE 500 stocks such as Anand Rathi Wealth, Gravita India, Mrs. Bectors Food Specialties and The Anup Engineering hit their one-year high levels today, while Atul, Aurobindo Pharma, Balaji Amines and Biocon were among those which touched their 52-week lows.

Market Breadth

Out of 3,646 stocks, 1,037 stocks advanced while 2,492 stocks declined. 117 stocks remained unchanged today.

Q3 results on Friday

Bajaj Finance, Vedanta, AIA Engineering, Sterlite Tech, Godfrey Phillips, Anupam Rasayan, Glenmark Life Sciences and Aarti Drugs would announce their respective Q3 numbers on January 27.

Also Read | Adani Power, Adani Wilmar, Adani Enterprises, Adani Green: 7 Adani stocks lost Rs 55,000 cr in m-cap today. Here’s why


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