Trade Setup for January 21: Nifty 50 index shows upward momentum; a move towards 24,000

After a period of consolidation and base formation between the 23,150–23,200 range, the Nifty 50 index is showing signs of upward momentum. The index surged by 142 points, closing at 23,345, supported by strong global cues ahead of Donald Trump's inauguration later today. This was also bolstered by a sharp rally in stocks like Kotak Mahindra Bank and Wipro, which posted strong Q3 results.

Market Overview

The week began on a positive note with the Nifty opening above Friday's high at 23,300. Although it dipped below 23,200 briefly during the first hour of trading, the decline was quickly bought into, allowing prices to climb and close near the day's high. The financial sector led the rally, with both Kotak Mahindra Bank and HDFC Bank being major contributors to the gains in both the Nifty 50 and Nifty Bank indices.

Vodafone Idea's shares jumped over 9% on news that the government may partially waive the AGR dues, although the company later clarified that it had not received any formal communication from the government on this matter.

The Indian Rupee gained against the US Dollar, aided by the rally in domestic equities and the strength of Asian currencies. Market participants are awaiting further cues from global developments, including President Donald Trump’s return to leadership, and the upcoming Indian budget.

Stock Market Movers

Kotak Mahindra Bank surged 9.21%, closing at ₹1920.50.

Wipro climbed 6.49% to ₹300.25.

Bajaj Finance rose 3.59% to ₹7440.10.

Bajaj Finserv was up 3.25% at ₹1735.20.

NTPC gained 3.04%, reaching ₹336.05.

What to Watch

Analysts suggest the market is expected to trade in a broad range with stock- and sector-specific actions likely to dominate, especially as Q3 earnings season picks up. Companies like Dixon Technologies, L&T Finance, and MCX have reported results, with several other key earnings to watch on January 21, including Dalmia Bharat, ICICI Prudential, KEI Industries, Tata Tech, PNB Housing, Cyient DLM, and Uco Bank.

The market also witnessed the listing of Laxmi Dental, which made a successful debut, opening with a 23% premium on BSE and 26.64% premium on NSE.

Nifty 50 Chart Analysis

The Nifty 50 index is nearing the critical resistance level of 23,400. A breakout above this level could open the door to a rally towards 23,550–23,570, further confirming bullish momentum. Key resistance levels to watch are 23,450 and 23,800/24,000, with support at 23,150 and stronger support in the 23,000–22,900 range, according to analysts.

Nifty Bank Outlook

The Nifty Bank index closed at 49,350.80, up 1.67%. It is expected to face minor resistance around the psychological 50,000 mark. A move above this level could drive further upward momentum. The index has regained its position above the 9 EMA, and the daily RSI is showing improving momentum. The support level has shifted higher, now at 48,900, which strengthens the index’s bullish outlook.

Stocks to Watch

TCS has opened a new delivery center in France, aimed at driving AI-powered transformation for the Aerospace and Defence industries.

Vodafone Idea clarified that it has not received any formal communication regarding a potential AGR dues waiver.

Cipla: The US FDA has issued Form 483 with one observation for its Medispray Laboratories manufacturing facility in Goa.

Reliance Power: Appointed Neeraj Parakh as the CEO for three years, effective January 20, 2025.

Landmark: Received a letter of intent from JSW MG Motor India to open new MG Select dealerships in Ahmedabad and Kolkata.

Analysts predict a range-bound market with a focus on corporate earnings and specific sector movements as the week progresses.