Market Outlook for 18th January 2024

Our markets started the day with a huge gap down due to sell-off in the index heavyweight HDFC Bank post its quarterly numbers. This dampened the market sentiments and the Nifty index corrected by a couple of percent to end below 21600 while the Bank Nifty index posted a loss of over four percent.

Nifty Today:

It was one of a rare trading sessions where stock such as HDFC Bank corrected by over 8 percent which led to a sharp sell-off in the benchmark indices. Just one day prior, Nifty has registered a new all-time high of 22124 and the index has now ended below 21600 level. The Nifty index is trading around its 20 DEMA support while the swing low of recent consolidation seen in the early part of this month is around 21450. This will be seen as the crucial support for any bounce and in case the index breaks the same, then it will be a breakdown from a Rising Channel of 600-650 points, indicating a possible down move of similar points from the breakdown point. This will indicate targets sub-21000 and hence, one should be keenly watchful on the same. On the higher side, today's gap area of 21850-22000 will be seen as the resistance now.

The INDIA VIX rallied by over 11 percent hinting at some cautiousness. Although the benchmark indices corrected, the midcap and the small cap stocks did not see such sharp fall and it relatively outperformed the index. However, the RSI readings on these indices too have given a negative crossover from the overbought zone, and thus one should be a bit cautious and wait for either a price-wise correction or a time-wise correction (consolidation) phase.

Nifty, Bank Nifty Levels and  FINNIFTY Levels: