The Indian stock market is poised for a positive opening on January 22, following a sharp selloff in the previous session. Trends indicate a likely rebound, with Gift Nifty trading at 25,362, a premium of approximately 184 points from Nifty futures' previous close, suggesting a gap-up start for the benchmark indices.

Market Performance on January 21

On Wednesday, January 21, the Indian stock market closed lower for the third consecutive session amid high volatility. The Nifty 50 ended 75 points or 0.30% lower at 25,157.50, while the Sensex closed 270.84 points or 0.33% down at 81,909.63.

Key Expectations for January 22

• Positive Opening: Tracking a rally in global markets, both Sensex and Nifty 50 are expected to open higher.
• Global Cues: Weakness in European markets may weigh on sentiment, potentially limiting the upside for Indian markets.
• Volatility: A sharp rise in India VIX signals elevated volatility. The volatility index surged 3.90% to close at 17.06, indicating heightened uncertainty.
• FII/DII Activity: Continued selling by Foreign Institutional Investors (FII) may restrain rallies, while consistent buying by Domestic Institutional Investors (DII) could provide downside support. On January 21, FIIs net sold ₹1,787.70 crore, while DIIs net purchased ₹4,520.50 crore.

Technical Outlook

• Sensex: Sensex formed a long-legged Doji candlestick on daily charts, indicating indecisiveness between bulls and bears.
  • Key support levels: ₹81,700 and ₹81,500.
  • Key resistance levels: ₹82,600 and ₹83,000.
  • A fall below ₹81,500 could change market sentiment.
• Nifty 50: The Nifty 50 index formed a doji candle with wicks on both sides, reflecting ongoing market indecision.
  • Support levels: 22,800 and 23,000.
  • Resistance levels: 23,200 and 23,300.
  • Nifty 50's RSI dropped to 36, indicating weakening momentum and room for further declines.
• Broader Trend: According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the broader trend has turned bearish. A breakdown below 22,800 could lead to further declines.
• Market Strategy: Shrikant Chouhan from Kotak Securities suggests that level-based trading would be an ideal strategy for day traders, given the intraday market volatility.

Important Considerations

• Analysts suggest a cautious to mildly bearish bias, with a "sell-on-rise" structure.
• Investors should closely monitor global cues, FII/DII activity, and key technical levels to make informed decisions.
• The market may remain range-bound amid weak banking sentiment.

Nifty 50

The Nifty 50 index represents the weighted average of the 50 most significant and liquid stocks listed on the National Stock Exchange (NSE) of India. It is calculated using a free-float market capitalization method. The index composition is reviewed semi-annually to ensure it accurately reflects the current economic landscape.