Nifty 50, Sensex today: What to expect from Indian stock market in trade on January 18

The Indian stock market indexes, Sensex and Nifty 50, are likely to extend losses and open lower on Thursday on the back of weak global market cues.

The trends on Gift Nifty also indicate a negative start for the Indian benchmark index. The Gift Nifty was trading around 21,417 level as compared to the Nifty futures’ previous close of 21,587.

The domestic market underwent a sharp correction on Wednesday with the benchmark Nifty 50 falling below 21,600 level dragged by heavy selling in bank stocks.

The Sensex cracked 1,628.01 points, or 2.23%, to end at 71,500.76, while the Nifty 50 ended 460.35 points, or 2.09%, lower at 21,571.95.

Nifty 50 formed a reasonable negative candle on the daily chart with a long upper shadow. The huge opening downside gap remains partially filled. 

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“Technically, Wednesday’s pattern indicates a significant reversal pattern on the downside and unfilled opening downside gap could be considered as a bearish breakaway gap. Normally, such bearish breakaway gaps are formed near important top reversals,” said Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities.

The recent upside breakout of the consolidation pattern has been nullified and the Nifty is currently moved below the 10-day EMA at 20,740 and is now placed at the edge of breaking below another support of 20-day EMA at 21,570 levels, he added.

According to Shetti, the short-term trend of Nifty seems to have reversed down sharply. There is a higher possibility of Nifty sliding further down to the next lower support of 21,000 levels in the near term. 

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Here’s what to expect from Nifty 50 and Bank Nifty today:

Nifty 50 Open Interest (OI) Data

Examining the Open Interest (OI) data, Mandar Bhojane, Research Analyst at Choice Broking said the call side revealed the highest OI at 21,800, followed by 22,000 strike prices. On the put side, the maximum OI was observed at the 21,000 strike price.

Nifty 50 Predictions

Nifty 50 saw massive selloff on Wednesday on the back of weak global cues and closed the day sharply lower by 460 points.

“Nifty witnessed a significant decline driven by profit-taking following its record high of 22,124 in the previous trading session. Wednesday's profit booking led the index to the 21-day Exponential Moving Average, a crucial short-term moving average. Sentiment could potentially deteriorate further if Nifty drops below 21,550, where the 21-EMA is situated,” said Rupak De, Senior Technical  Analyst, LKP Securities.

On the downside, a breach of 21,550 may result in the index descending towards 21,350. Conversely, on the upside, resistance is observed at 21,650, he added.

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Bank Nifty Predictions

The Bank Nifty index declined sharply by 2,061 points, or 4.3%, to close at 46,064 on January 17, dragged by sell off in the heavyweight HDFC Bank. 

“The index sharply fell below the 38.20% Fibonacci Retracement level of the previous leg of the rally (from 43,230 to 48,347). Additionally, the index retreated within the area of the previous swing high after a consolidation breakdown on the daily chart. The sentiment may remain weak, with immediate support at 45,900-45,930,” De said.

He believes a drop below 45,900 could potentially initiate a further correction towards 45,500 and on the upside, resistance is identified at 46,350.

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