There was weakness in the market on January 21 as well. Barring FMCG, all sectoral indices declined on this day. At the same time, the volatility index India Vicks rose by more than 6 per cent to reach the level of 19. Sensex closed 427.44 points lower at 59,037. Nifty50 index fell 140 points to close at 17,617 level. Nifty has formed a doji pattern on the daily chart. Its closing was close to its opening level. Last week, the Nifty had fallen 3.5 per cent and formed a large bearish candle on the weekly scale.
Nagraj Shetty of HDFC Securities says that a small sized candle has been seen on the daily chart. Along with this, upper and lower shadows have also been formed. Technically this formation indicates a doji or high wave candle pattern. These patterns are indicative of high volatility in the market at lower levels.
The formation of such a doji pattern after a strong bullish or bearish trend is considered a sign of a trend reversal. An upside bounce can be expected in the market in the short term after the steep fall in the last two trading sessions. However, he also says that the short term trend of Nifty remains weak with high volatility.
He further said that there is support near the level of 17,600-17,500 and the doji formation on Friday’s swing low is showing the possibility of an upside bounce or a slight decline from here. The confirmation of the bottom reversal will give an idea of the upside bounce coming from here. There is an immediate hurdle for Nifty at 17,800 level.
Like the giants on the previous trading day, there was weakness in small and medium stocks too. Nifty Midcap 100 index saw a weakness of 2.4 percent. At the same time, the Smallcap 100 index closed with a fall of 2.3 percent.
Here are some statistics on the basis of which you will be able to catch profitable deals. Please note here that the Open Interest (OI) and Volume of Stocks figures in this story are the sum total of three months’ data, not just the current month.
Key support and resistance levels for Nifty
The first support for Nifty is located at 17,499.47 and after that the second support is located at 17,381.73. If the index turns upwards, then it may face resistance at 17,721.27 then 17,825.33.
The first support for Nifty Bank is located at 37,285.34 and after that the second support is located at 36,996.37. If the index turns upwards, then it may face resistance at 37,802.14 then 38,029.97.
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