The Nifty 50 index has now declined in five out of the last six trading sessions but remains confined in a narrow range. Wednesday's session was equally listless with the index facing resistance at the mark of 18,000 but managed to hold its 17,800 support.

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Wednesday's intraday low for the Nifty 50 was 17,824, lower than Tuesday's low of 17,856. The index closed 70 points off the lowest point of the day.

HDFC Bank led the market recovery ending with gains of over 1 percent. Metals continued to gain while Bharti Airtel was a laggard after JPMorgan's downgrade.

Dealers that CNBC-TV18 spoke to continue to maintain that the Nifty 50 is stuck in a range of 17,800 on the downside and 18,300 on the upside.

A Balasubramanian of Aditya Birla Sun Life AMC believes that 2023 is going to be a year of consolidation as far as the equity market is concerned. "While the macro factors continues to be favorable for driving economic growth to the next levels, but having seen a significant movement in the equity market, we should see some consolidation," he said during an interaction with CNBC-TV18.

Among the key triggers for today's trading session would be earnings of technology majors Infosys and HCLTech along with inflation data that would be reported after market hours.

What do the charts suggest for Dalal Street?

Ruchit Jain of 5paisa.com advises traders to avoid forming short positions close to Nifty 50's support levels and use 17,770 levels as a reference for long positions. He also expects the market to give more clarity over the next few sessions as key macro data and earnings get reported in India and the US.

Nifty 50's Relative Strength Index (RSI) is in the bearish crossover on the daily chart indicating sluggish momentum, according to Rupak De of LKP Securities. He sees resistance for the Nifty 50 at 18,000 and 18,250.

The Nifty Bank index was an outperformer on Wednesday, managing to recoup some of the losses from Tuesday's fall. The index saw strong buying from levels of 41,700 and managed to hold on to the support of 42,000. Kunal Shah of LKP Securities expects the index to remain volatile in the coming sessions and a break below levels of 41,700 will accelerate the move on the downside. Immediate resistance on the upside is seen at 42,350 and 42,400. A move above these levels may take the index to 42,700, according to Shah.

Here are key things to know about the market ahead of the January 12 trading session:

SGX Nifty

On Thursday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — increased 50 points or 0.3 percent to 17,999.5, thereby pointing to a positive opening for the market.

Global Markets

Most Asian markets have opened higher, carrying on from a positive handover from Wall Street. The Nikkei 225 and the Topix are up 0.2 percent each while South Korea's Kospi is up 0.6 percent.

Benchmarks on Wall Street ended higher on Wednesday ahead of key inflation data later this evening. The Dow Jones gained more than 250 points, while the S&P 500 added more than a percent. The Nasdaq rose for the fourth straight day, gaining close to 2 percent.

What to expect on Dalal Street

Nagaraj Shetti of HDFC Securities said that the Nifty 50 is now placed at the lower end of the triangle it formed over the last few weeks. While the short term trend for the index remains negative, the odds of a decisive breakout below 17,800 are higher in the near term, according to him. He sees immediate resistance for the index at 18,000. The Nifty 50 made an intraday high of 17,976 on Wednesday.

This was the first instance of the index making an intraday high below 18,000 since October last year.

Market Expert Ambareesh Baliga believes that the Nifty 50 will find it difficult to cross 18,400. He also sees muted earnings growth across sectors as most companies, after stocking up huge inventories, can see inventory losses. He also does not see any support from FIIs who have been constant sellers. He expects the Nifty 50 to fall towards 17,000 or even lower in case it breaks its downside support of 17,800.

Key levels to watch out for

For today's weekly options expiry on the Nifty 50, the 17,900 call strike added 24.1 lakh shares in Open Interest, followed by the 18,000 call, that added 13.7 lakh shares.

On the put side, the 17,800 put saw maximum Open Interest addition with 26.4 lakh shares, followed by the 18,000 put, that added 12.6 lakh shares. The 17,900 put saw addition of 8.4 lakh shares.

Nifty 50's Put-Call Ratio has remained flat at 0.75, compared to Tuesday's 0.71.

GNFC and Indiabulls Housing Finance are two stocks that continue to remain in the F&O ban.

FII/DII activity

Jyotivardhan Jaipuria of Valentis advisors said that India on the valuation front is very expensive compared to the whole emerging market valuation. He expects some of the flows to go towards cheaper countries which underperformed in 2022. "So, India underperforms the emerging market, but we may still get better flows than we got last year just because the emerging market pack comes more into focus," he said.

Long build-up (Increase in price and Open Interest)

Short build-up (Decrease in price and Increase in Open Interest)

First Published:Jan 12, 2023 5:27 AM IST