A big gap down followed by a sharp intraday decline

NIFTY:

The NIFTY opened at 21647.25 with a huge gap down of 385 points. The index initially bounced up sharply for the first five minutes of trading but failed to fill the gap and turned down. Prices have recorded its intraday high at 21851.50 and saw a sharp decline of almost 300 points. The down move was sharp and lasted for the whole day without any relief rally in between. The index moved sideways for the last 30 minutes of trading and recorded its intraday low at 21550.45. Prices have finally closed at 21571.95 with a loss of 460.35 points or 2.09% down. The IT sector outperformed and was the only sector that closed with a gain of 0.64% BANK and FINANCIAL underperformed, led the bears, and closed with a loss of over 4% followed by METAL, REALTY, and AUTO. The short-term trend is down now. We have been tracking support around 21500 and resistance around 21800. The NIFTY broke the support level decisively and closed much lower. The long-term trend is down while the long-term momentum turned down from the strength zone and is now heading toward the weak zone.

BANK NIFTY:

The BANK NIFTY opened at 46573.95 with a huge gap down of over 1500 points. The index initially moved higher, but failed to continue that momentum and started drifting downwards after recording its intraday high at 47212.75. From this point, the index kept on sliding lower for the whole day, saw a down move of more than 1000 points, and recorded its intraday low at 45979.60. Prices have finally closed at 46083.50 with a loss of 2028 points. PVT BANKs have underperformed, saw a sharp downside move, and ended with a big loss of 4.23%. PSU BANKs have also moved down, saw a sharp intraday decline, and ended with a loss of 1.74%. Within the index, in terms of points, HDFC BANK contributed the highest on the downside followed by ICICI BANK. The short-term trend is down now. We have been tracking a narrow trading range of 1500 points with support around 47000 and resistance around 48500. The index was broken down decisively and also reached the pattern target on the same day.

DERIVATIVE PICKS

TOP  DELIVERY PERCENTAGE

UPCOMING ECONOMIC DATA

NEWS UPDATES

• While the benchmark indices tanked over 2% on Wednesday—weighed mostly by banking stocks—market analysts said the pain has just started and investors must switch to a “sell on rise” strategy. Banking stocks looked topped out even a few weeks ago, according to Jai Bala, founder and chief market technician at Cashthechaos.

• Asian Paints on January 17 reported a consolidated net profit of Rs 1,475.16 crore for the third quarter of the financial year 2023-24, up 34.4 percent from Rs 1,097.06 crore in the year-ago period. Sequentially the profit was up 19.69 percent.

• Adani Group plans to retain a 7 percent stake in its packaged goods joint venture, Adani Wilmar Ltd, after a planned share sale to global alternative investors, people aware of internal discussions said. The Indian infrastructure conglomerate, along with its foreign partner Wilmar International, will, however, maintain a majority 51 percent stake in the venture, they said.

Source: Economic Times,  Indian Express, Business Today, Livemint, Business Standard, Bloomberg Quint

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