Trade Setup for January 20: Technical perspective, Nifty remains under bearish control
Nifty closed lower at 25,585 as selling pressure persisted. Analysts say 25,500 is a key support; a break could drag the index toward 25,200.
Trade Setup for January 20
The Nifty extended its corrective phase on Monday, slipping below key levels as heavyweight stocks dragged the index lower. Analysts say the 25,500 support is crucial—holding could spark a rebound, while a breakdown may accelerate losses toward long-term averages.
After a brief consolidation, the Nifty resumed its downward trajectory on Monday, closing 108 points lower at 25,585—its lowest level in the current correction. The benchmark has now declined nearly 3 percent from its all-time high of 26,373.
The index opened with a downside gap of about 40 points and came under sharp selling pressure early in the session. Although a mild intraday recovery was seen, the market largely traded in a narrow range and closed off the day’s lows, reflecting cautious sentiment.
Weak quarterly earnings from index heavyweights weighed heavily on market mood. The Nifty failed to sustain above the key 25,600 mark, with Reliance Industries and ICICI Bank emerging as major drags. More than 30 Nifty constituents ended the session in the red, including Wipro, Reliance Industries, Eternal, and ICICI Bank.
Sectorally, FMCG and auto stocks offered some resilience, while all other sectoral indices closed lower. The broader market echoed the weakness, with the Nifty Midcap 100 slipping 0.37 percent and the Nifty Smallcap 100 declining 1 percent.
Stock-specific reactions to earnings remained sharp. Wipro shares plunged over 9 percent, while Reliance Industries fell 3.5 percent. ICICI Bank declined 3.4 percent and HDFC Bank shed around 1 percent.
On the macro front, sentiment received limited support after the International Monetary Fund revised India’s growth outlook upward, projecting GDP growth of 7.3 percent in FY26—70 basis points higher than its earlier estimate—and 6.4 percent in FY27.
Looking ahead, analysts expect markets to trade cautiously while tracking global cues and ongoing earnings announcements. Siddhartha Khemka of Motilal Oswal said geopolitical developments remain a key risk factor that could influence near-term direction.
From a technical perspective, the Nifty remains under bearish control, continuing to trade below its 20-day exponential moving average. Nagaraj Shetti of HDFC Securities said a sustained bounce from the 25,500 support could trigger a short-term recovery, but a decisive break below this level may drag the index toward 25,200, near the 200-day EMA.
Rupak De of LKP Securities sees resistance near 25,700, with downside risks persisting as long as the index remains below this level. Meanwhile, Nandish Shah of HDFC Securities warned that a clear breach below 25,473 could break the current consolidation range and accelerate the fall toward the next major support around 25,318.
