Nifty to move in 10,500-11,000 range in January

The market is likely to continue to be bullish and the index could go higher, according to technical analysts. Experts also say that IT, infrastructure, automobile and oil & gas sectors are expected to show strength in the coming weeks.

RAHUL SHARMA
Head – Technical & derivatives strategy - CENTRUM BROKING

Where we are: Last week, we saw a gap-up opening in the Nifty and the index crossed the previous two-week high of 10,560. After sustained trading in the middle of the week, fresh buying interest was seen amidst some intraday volatility on Friday. NiftyBank too witnessed similar activity, while Nifty IT gained 4 per cent last week to end around its two-year high.


What is in store: The Nifty is witnessing quite a resilient rally and every intraday dip is being used as a buying opportunity. The resistance for the Index is expected in the range of 10,850-10,875, whereas 10,550 would now become a strong support going forward. Nifty options data is also suggesting a range of 10,500-11,000 for the rest of the January series.

What could you do: We have been consistently recommending our clients to buy Nifty Call options of March expiry at every dips since last December to play the current upmove. Positional traders are advised to maintain 10,450 as the turnaround level for the Nifty and the broader market whereas there is a very high possibility of the current momentum taking the Nifty up to 11,000 levels by expiry. We advise hedging long portfolios ahead of the major event next month.

NiftyIT, which has been a major outperforming index, is expected to see some profit booking, but corrections, if any, are expected to get bought into. Banking stocks might see selective action happening whereas the broader index can become rangebound.