Trade Setup For Jan. 7: Nifty Likely To Test Support At 23,260–23,460

The Indian stock market is anticipated to experience fluctuations as analysts analyze the near-term performance of significant indices. On January 6, 2025, the NSE Nifty 50 closed down by 388.70 points, or 1.62%, settling at 23,616.05, while the BSE Sensex dropped 1,258.12 points, or 1.59%, concluding at 77,964.99.

Market Volatility

Concerns related to the human metapneumovirus (HMPV) are contributing to volatility in the markets. According to market experts, the Nifty index may attempt a short-term recovery if it stays above the critical threshold of 23,500. If it falls below this level, it could indicate a further weakening trend.

Siddhartha Khemka, head of research at Motilal Oswal Financial Services, mentioned that while the markets are volatile, there may be specific stock and sector movements driven by pre-quarterly business updates and the impending third-quarter earnings season.

Resistance and Support Levels

Technical analysis suggests that the Nifty is on track to test its previous support range of 23,260 to 23,460, as indicated by strong bearish signals on the daily chart. The resistance level for the index stands at 23,900, according to Aditya Gaggar from Progressive Share Brokers Pvt.

The Bank Nifty also shows signs of weakness, with Hrishikesh Yedve pointing out that the immediate support level is between 49,700 and 49,600. A sustained position below 50,500 could exacerbate the downturn.

Market Recap

In the broader market context, both benchmark indices saw substantial declines reminiscent of previous months, marking the largest drop since October 3, 2024. The last two trading sessions have been characterized by extensive sell-offs in Indian equities, resulting in heightened market volatility and eroded investor confidence.

Currency and Commodity Insights

In the currency market, the Indian rupee experienced a slight depreciation, closing at 85.83 against the US dollar, down five paise from the previous session. This movement follows a pattern of cautious trading that correlates with the overall market uncertainty.

Additionally, significant outflows have been observed in the oil and gas sectors, with foreign investors withdrawing $5.4 billion in anticipation of disappointing earnings reports.

Nifty, Market, Investors