Bulls Gear Up as Markets Hover Near Key Levels

StockEdge's Morning Market Analysis - 16th Jan - 2025

The Nifty gained 37 points over the day to close at 23,213. It was again a pause day in the markets, with the index moving in a tight range. The Real Estate ?? and PSE sectors were the top gainers. The Advances and Declines were neutral ??. The broader market breadth has improved from extreme oversold levels ??. FIIs continue to be sellers ???.

However, the US inflation data released last evening was in favor of the bulls ??, with numbers dropping to 2.4% — almost at a 3.5-year low. This provided a good uptick in the US markets, with major indices seeing around a 2% upmove ??. The Dollar Index is trading near 109+ levels.

Technically, the positive takeaway from the last two days of inside doji candles ??? is that follow-up selling is absent, signaling a pause in bearish momentum??. The extreme oversold levels on the market breadth and some indicators are easing out.

The stochastic indicator appears to be forming a base in the oversold region and may turn upward ??. Interestingly, the RSI indicator ?? has not broken the November lows despite prices doing so, showing signs of positive divergence. However, these observations will only hold if supported by price action.

The first resistance is at 23,350. A close past this level will signal stability and that the bulls are gaining strength ????. The next resistance lies at 23,500. A recovery to these levels may be possible. 23,140 and 23,000 are the immediate short-term supports.

To Conclude: A gap-up higher opening ?? around 23,300–23,350 is expected. How the bulls ?? take it from there will be crucial.

Levels:

Nifty

Support: 23,000, 22,800

Resistance: 23,350, 23,500

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Bank Nifty

Support: 48,500, 48,300

Resistance: 49,000, 49,230

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