Trade Setup for 27 January: Market faces weakness amid range-bound activity

As we head into Monday, January 27, 2025, the outlook for the Sensex remains cautious. Domestic indices ended the week with losses on Friday, with the 30-share BSE benchmark Sensex losing 329.92 points, closing at 76,190.46. Similarly, the NSE Nifty 50 index fell by 113.15 points, ending at 23,092.20. The market continued to experience selling pressure at higher levels, with the IT sector outperforming, while real estate saw significant losses.

Amol Athawale, VP of Technical Research at Kotak Securities, commented that the market is currently forming a lower top formation on daily charts, indicating a negative trend. However, he believes that due to temporary oversold conditions, we may see range-bound activity in the near term.

Key Support and Resistance Levels for Sensex:

Support: 75,800–76,000

Resistance: 77,000

If the Sensex sustains above 76,500, there could be an upward move toward 77,000. However, a dip below 76,200 could trigger panic selling, pushing the index down to 75,800, which is considered a crucial support zone. Traders should closely monitor these levels to assess market strength or weakness.

Jigar Patel from Anand Rathi Shares and Stock Brokers also noted the choppy movement of Sensex, which respected the support at 76,000 and resistance at 77,000 last week. For Monday, the key levels to watch are 75,800–76,000 for support and 77,000 for resistance.

For traders, Kotak Securities’ Athawale highlighted the 77,000 and 77,300 levels as important resistance zones for bulls. On the flip side, 75,700 and 75,500 are key support zones. If the market surpasses 77,300, it could rally towards 77,800–78,000. However, a fall below 75,500 could intensify selling pressure.

As the Union Budget 2025 presentation draws closer, the market is likely to remain volatile. Ajit Mishra from Religare Broking recommended that traders adopt a stock-specific approach and consider hedged positions to navigate these uncertain times.

Disclaimer: Always consult a financial advisor before making investment decisions.