Indian stock markets snapped a two-day losing streak on Friday, January 16. The benchmark indices closed higher, lifted by strong performances from major IT and banking companies. Investors welcomed positive news from the technology sector and anticipated robust quarterly earnings from banks.
Market Performance Highlights
The BSE Sensex climbed 188 points, or 0.23%, to settle at 83,570.35. The NSE Nifty 50 gained 29 points, or 0.11%, finishing the session at 25,694.35. This upward movement ended a brief period of declines for both indices.
Information technology stocks led the rally. Infosys, TCS, and Tech Mahindra posted significant gains. Infosys boosted market sentiment by upgrading its revenue growth forecast. Banking stocks also contributed to the rise, with investors expecting strong third-quarter financial results from the sector.
Notably, the top five gainers within the Nifty 50 index were all IT companies. This underscores the sector's dominant role in driving Friday's market recovery.
Technical Outlook for Key Indices
Nifty 50 Analysis
Sumeet Bagadia, Executive Director at Choice Broking, observed that the Nifty 50 traded with a range-bound to mildly positive bias on Friday. He noted continued caution among market participants due to a lack of strong global or domestic catalysts. The index experienced intraday volatility throughout the session.
Bagadia provided a detailed technical perspective. He stated that the Nifty 50 continues to trade in a corrective consolidation phase on the one-hour timeframe. This follows a sharp decline from recent highs. The index has established a base near the 25,600–25,550 zone, where repeated buying interest is evident. This indicates short-term demand at these lower levels.
The price currently trades below the 20, 50, and 100 Exponential Moving Averages (EMAs), reflecting weak short-term momentum. The 200 EMA near 25,940 acts as a key overhead resistance level. Recent candlestick patterns show a mild recovery attempt. However, the structure still displays lower highs, suggesting the move is corrective rather than a trend reversal.
Immediate resistance is placed at 25,800–25,850, followed by a stronger supply zone near 25,900. On the downside, 25,500–25,550 remains a crucial support area. A breakdown below this level could invite further selling pressure.
Bank Nifty Analysis
Bank Nifty traded with a mild positive bias on Friday, showing relative strength compared to the broader market. It witnessed an intraday recovery. After facing selling pressure in the first half of recent sessions, the index attracted buying interest near lower levels. It managed to reclaim key intraday averages, signaling improving sentiment.
Bagadia explained that Bank Nifty has formed a short-term higher low structure on the one-hour chart, followed by a steady recovery. The index has moved back above the 20 and 50 EMAs, suggesting a return of short-term momentum. The recovery from the recent swing low near 59,000 indicates active defense of this zone by buyers.
However, the price is still approaching a supply area near prior breakdown levels, which keeps the structure cautious. Immediate resistance lies around 60,300–60,400, where selling pressure may re-emerge. A decisive breakout and acceptance above this zone could open room for further upside.
On the downside, 59,700–59,800 acts as the first line of support. The 59,600–59,500 zone remains a crucial breakdown level. A breach below this could negate the current recovery attempt.
Stock Recommendations for Next Week
Sumeet Bagadia recommends three stocks to consider buying on Monday: Bank of Baroda, JSW Steel, and Grasim Industries.
1. Bank of Baroda
Buy at: ₹308.25
Target: ₹330
Stop Loss: ₹295
Bank of Baroda maintains a strong bullish trend on the daily chart, marked by consistent higher highs and higher lows. After a prolonged mid-year consolidation, the stock witnessed a decisive trend resumption breakout. It now trades at all-time highs.
The price sits firmly above the 20, 50, 100, and 200 EMAs. All key moving averages align upward, confirming strong trend strength across timeframes. The 20 EMA acts as immediate dynamic support, indicating sustained short-term momentum.
Volume expanded noticeably during impulsive up-moves. Corrective phases saw relatively lower volumes, suggesting healthy consolidation rather than distribution. Structurally, the zone around 295–300 now acts as a crucial demand area and defining stop-loss level. As long as the price holds above this zone, the bullish structure remains intact. It favors continuation toward the 325–330 target zone in the near term.
2. JSW Steel
Buy at: ₹1187
Target: ₹1280
Stop Loss: ₹1145
JSW Steel exhibits a well-defined bullish trend on the daily chart, supported by strong price structure and moving average alignment. After a corrective phase from recent highs, the stock staged a healthy pullback and rebound. This indicates renewed buying interest at lower levels.
The price trades above the 20 EMA and 50 EMA, both of which have started turning upward. This reflects strengthening short-term momentum. The stock also continues to hold comfortably above the 100 EMA and 200 EMA, reinforcing the broader bullish bias and trend stability.
Volume behavior supports the move. Higher volume appeared during the recent recovery, while the corrective phase showed relatively muted volumes. This suggests accumulation rather than distribution.
Structurally, the 1145 zone aligns with the 50 EMA and recent swing support. This makes it a logical trend-defining stop-loss level. As long as the price sustains above this level, the bullish setup remains intact. It favors continuation toward the 1280 target zone.
3. Grasim Industries
Buy at: ₹2809
Target: ₹3000
Stop Loss: ₹2700
Grasim Industries is currently in a range-bound to mildly bullish structure within a broader uptrend. The stock has been consolidating after a strong prior rally. This indicates a time-wise correction rather than price-wise damage.
The price hovers near the 20 EMA and 50 EMA, suggesting short-term indecision. The 100 EMA and 200 EMA continue to slope upward and act as strong medium- to long-term support. This preserves the overall bullish framework.
Volume remained largely muted during the consolidation phase, reflecting a lack of aggressive selling pressure. Periodic volume spikes during up-moves suggest selective accumulation at lower levels.
Structurally, the 2700 zone serves as a key demand area and defining stop-loss level. As long as the stock sustains above this base, the consolidation is likely to resolve on the upside. Potential upside targets lie toward the 3000 resistance zone.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
