Trade setup for January 17: Market to focus on Reliance and Infosys Q3 results

The trading session on Thursday started with an upside gap, followed by range-bound movement. The Nifty opened 164 points higher, but faced minor weakness early on before settling into a narrow range. It closed the day up 98 points at 23,312.

The Nifty extended its winning streak for the third consecutive session, though uncertainty remains as the index trades within a limited range. Mid- and small-cap stocks outperformed the broader market, with the Nifty Midcap 100 gaining 1.08% and the Nifty Smallcap 100 rising 1.67%.

Technically, despite some selling pressure at higher levels after the gap-up opening, the market managed to close above the key resistance level of 23,300, which is seen as a positive sign.

Key Stocks and Market Sentiment:

HDFC Life shares surged 9% after reporting better-than-expected results for the December quarter. Its annualised premium equivalent (APE) rose by 12% to ₹3,122 crore, and the Value of New Business (VNB) increased by 9% to ₹930 crore, surpassing estimates.

Asian markets tracked Wall Street's gains, supported by positive US core inflation data that raised expectations for potential Federal Reserve rate cuts in 2025. Developments in the Israel-Hamas ceasefire and a reduced trade deficit further boosted sentiment. However, weak economic growth data from the UK tempered optimism.

Looking ahead to Friday, market attention will shift to earnings reports from Tech Mahindra, Wipro, and SBI Life. Market reactions to Reliance Industries' Q3 results will also play a pivotal role. Reliance posted strong results, with EBITDA rising 12% quarter-on-quarter, driven by O2C and Retail segments, while Telecom and Oil & Gas businesses performed in line with expectations. Additionally, earnings from Infosys, Axis Bank, LTIMindtree, and Havells, released after market hours on Thursday, will influence Friday’s trading sentiment.

Nifty 50 Chart Analysis:

The Nifty 50 index ended the session at 23,311.80, gaining 0.42%. The short-term trend is positive, but the market lacks momentum for a sharp breakout. A sustained move above 23,400-23,450 could trigger further upside, with a possible target of 23,700. Immediate support is at 23,150.

The Nifty is currently hovering near the critical 23.6% Fibonacci retracement level at 23,320, which may influence the near-term trend. On the upside, 23,400 remains a key resistance level, and only a decisive move above it may lead to higher levels. Support is seen at 23,150 and 23,000.

Nifty Bank Chart Analysis:

The Nifty Bank index closed at 49,278.70, gaining 1.08%. It has been advancing steadily, with the RSI showing signs of a rebound. The index is approaching the 50,000 mark, a crucial resistance level. A sustained close above 50,000 for two consecutive sessions could confirm a recovery after the recent downturn.

In the near term, the index is likely to test the 50,100 zone, setting the stage for a decisive move. However, a breach below the critical support at 48,750 could weaken the bullish outlook.

Stocks to Watch:

Reliance Industries: Strong quarterly results, with a consolidated net profit of ₹18,540 crore and an EBITDA rise of 12%.

IRCTC: Sudhir Kumar appointed CFO effective January 16, 2025.

TVS Motor: Entering the Moroccan market in partnership with HindiMotors, launching TVS Ntorq 125, TVS Raider 125, and TVS Apache 160 and 200.

PFC Consulting: Transfers two transmission arms to Power Grid and GR Infraprojects.

Punjab National Bank: Binod Kumar appointed as MD & CEO of Indian Bank.

J&K Bank: SEBI issues warning for delayed MD and CEO appointment submission.

Suraksha Diagnostic: Amit Saraf resigns as CFO effective February 15, 2025.