Trade Setup for January 29: Can NIFTY50 Sustain Above 25,320 Levels on Thursday?

Indian equity markets are likely to start Thursday with caution because GIFT NIFTY futures show a gap-down opening based on mixed global market conditions. The NIFTY50 shows stability because it has maintained its position above the 200-day Exponential Moving Average (EMA) for two consecutive sessions which indicates a potential trend reversal from recent bearish movement.

The benchmark index closed in the green for the second consecutive session on Wednesday because it rebounded from the crucial psychological support zone of 25,000. The domestic markets received positive support from developments about the India–EU trade agreement which created favorable market sentiment.

Technical Outlook

The NIFTY50 shows increasing strength because it successfully protects its 200 EMA level. Market experts state that the index must break through and maintain its position above the 25,500 level to establish a definite medium-term bullish trend. The upcoming Union Budget announcement will increase market volatility while India VIX experiences a rapid upward movement.

Options Data Insight

Options data for the February 3 weekly expiry indicates a well-defined range:

Maximum Put Open Interest (OI): 25,000, pointing to strong support
Maximum Call Open Interest (OI): 25,500, indicating a stiff resistance zone

This setup suggests that the index may continue to trade within a narrow range in the near term.

Stock-Specific Action

Long build-up: BEL, ONGC, Coal India, Eternal
Short build-up: Asian Paints, Tata Consumer
Top traded futures: BEL, Maruti
Top traded options: TCS 3,300 CE

The stock market currently shows no stocks which are banned from trading under the F&O restrictions while multiple stocks have removed themselves from the ban.

Traders need to exercise caution with their trading activities because upcoming macroeconomic events will create potential market volatility which could lead to sudden price movements during upcoming trading sessions.

Disclaimer: The article serves as an informational resource which users should not consider as financial advice. Only experienced traders should attempt derivative trading because it entails financial risks. The stocks mentioned are illustrative and not investment recommendations.

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