Trade Setup for January 14: Nifty remains volatile reflects tug‑of‑war between bulls and bears

The Nifty remains volatile going into the January 14 expiry, with 25,700 pivotal as a key support level. Bullish momentum hinges on clearing the 25,900–26,000 zone, while a break below 25,600 could open the path to deeper correction. Traders are advised to watch these technical levels closely and approach the market with caution until a more decisive trend emerges.

The Indian equity market traded with sharp intraday volatility on Tuesday, January 13, as the Nifty 50 oscillated between gains and losses ahead of the weekly derivatives expiry. After an early gap‑up open reflecting positive pre‑market sentiment — selling pressure re‑emerged and dragged the benchmark index to an intraday low near 25,603 before a strong rebound in the final hour helped limit losses.

Despite sustained selling through much of the session, the Nifty managed to hold above the psychologically and technically significant 25,700 mark, a level supported by heavy put option open interest and seen by traders as a key near‑term floor.

At the close, the Nifty settled around 25,732, down modestly from the previous session, while the Sensex fell roughly 250 points. A broad recovery from the lows was reflected in the long lower shadows on the daily chart, signaling buyers stepped in on dips.

Market Breadth & Sector Performance

Market breadth was mixed:

Advancing sectors: PSU banks, media and IT showed resilience and helped cushion losses.

Lagging sectors: Consumer durables, realty and pharma saw profit‑taking, contributing to the overall negative finish.

In the Nifty 50 stock basket, ONGC, Eternal and ICICI Bank were among the top gainers, while Trent, Larsen & Toubro and Dr Reddy’s underperformed.

In broader markets, the Midcap 100 index slipped around 0.2 %, whereas the Smallcap 100 index showed strength with a gain near 0.6 %, highlighting some rotation into smaller‑cap stocks.

Technical Outlook: Support, Resistance & Strategy

Technically, the Nifty’s price action reflects a tug‑of‑war between bulls and bears in a volatile, range‑bound environment:

Key Levels to Watch

Support: Around 25,700–25,600, reinforced by maximum put option open interest and recent price action.

Resistance: The 25,900–26,000 zone remains the immediate upside hurdle; a decisive break above this range would be needed to shift momentum in favour of the bulls.

Senior market technicians noted that while the index defended lower support levels, short‑term momentum indicators remain cautious with the Nifty still below key moving averages. Without a clear breakout above 25,900, price action is likely to remain range‑bound in the near term.

Analysts also point to the medium‑term 100‑day exponential moving average near 25,600 as a critical technical support — a break below which could accelerate downward pressure toward the 25,400 zone. Until the Nifty reclaims and sustains above 26,000, many brokers favour a sell‑on‑rise strategy.

Market Drivers and What’s Ahead

Market participants are now turning their focus to the weekly options expiry on January 14, where heavy open interest at strikes near current levels could intensify intra‑session volatility. Derivatives data suggests that downside put interest remains concentrated around the 25,700 area, reinforcing its significance as short‑term support.

Attention will also shift toward earnings releases and corporate announcements over the coming sessions — including results from several major companies — which may provide fresh catalysts for the market’s direction.