January 22, 2025 — Nifty Trade Setup for Thursday, Outlook ahead of weekly expiry. The Nifty 50 index closed on a strong note today, adding 130.70 points (+0.57%) to settle at 23,155.35. This positive close comes after an exciting trading session that saw the index battle and ultimately break a key resistance level at 24,120, providing a bullish sentiment heading into tomorrow’s weekly expiry.
Market Recap
The trading session began on a cautious note, with the index opening at 22,099.15, significantly lower than yesterday’s close. However, as the session progressed, buying interest pushed the index upwards, eventually testing the critical resistance level of 24,120. The first attempt to breach this resistance failed, but during the second attempt at 2:45 PM, Nifty successfully broke through and rallied to close near its intraday high of 23,169.55.
The day’s low was recorded at 22,981.30, marking a volatile yet rewarding session for traders. The resilience in the market was evident as it closed above critical levels, setting the stage for an eventful expiry session tomorrow.
Trading Range for Thursday
With Thursday marking the weekly expiry, traders should prepare for heightened volatility. Based on technical analysis and market trends, Nifty is expected to trade within the range of 22,970 to 23,330.
Key Levels to Watch
1. Resistance Levels:
– Immediate resistance is placed at 23,170, which aligns with today’s close and intraday high.
– A break above this level could propel the index to the upper target of 23,330.
2. Support Levels:
– Immediate support is seen at 23,990, a critical level for maintaining bullish momentum.
– If the index falls below 23,990, it could move toward the lower end of the range at 22,870.
Trading Strategy for Expiry Day
Bullish Scenario
– If Nifty sustains above 23,170, traders can go long with a target of 23,330.
– To manage risk, a stop loss of 23,110 is recommended for long positions.
Bearish Scenario
– If Nifty trades below 23,100, it is advisable to consider short positions targeting 22,870.
– In this case, a stop loss of 23,140 is crucial to protect against adverse price movements.
FII and DII Data
– Domestic Institutional Investors (DII): Net buyers with an inflow of ₹3,640.22 crore on Wednesday.
– Foreign Institutional Investors (FII): Net sellers with an outflow of ₹4,026.25 crore.
The contrasting flows between FIIs and DIIs highlight the mixed sentiment in the market, with DIIs showing optimism while FIIs booked profits. This divergence could lead to increased volatility in tomorrow’s trading session.
Factors to Watch for Thursday
1. Global Cues: Overnight movements in global markets and key economic data releases could impact the opening sentiment.
2. FII/DII Activity: Continued participation from FIIs or changes in DII behavior could influence market direction.
3. Option Data: The maximum open interest (OI) on the call side is seen at 23,200, indicating a cap on the upside, while strong put writing at 23,000 reflects support around that level.
Conclusion
Tomorrow’s weekly expiry session is set to be dynamic, with Nifty poised for significant movements within the defined range of 22,970 to 23,330. Traders are advised to approach the market with well-defined strategies and strict risk management.
*Disclaimer
This analysis is for informational purposes only and is not a recommendation to buy or sell any securities. Consult with a financial advisor before making investment decisions.