Trade Setup For Feb.1: Nifty Eyes Budget-Day Support At 23,310
"The undertone will remain positive with the downside being protected at 23,400 while on the higher side, 23,740-23,860 will be considered as a strong resistance zone," Aditya Gaggar said.
Nifty holds above 23,310 support, with resistance at 23,740-23,860. Analysts highlight strong bullish breakout signalling strength, but budget-day volatility remains key. The undertone stays positive, with 23,400 acting as crucial downside support, as per analysts.
From a technical perspective, Nifty crossed its short-term hurdle of 23,430 and formed a strong bullish candle on the daily chart, indicating strength, according to Hrishikesh Yedve, AVP technical and derivatives research at Asit C Mehta Investment Intermediates Ltd. "The index also sustained above its 21-Day Simple Moving Average or 21-DSMA, at 23,310, making it an immediate support level, while trendline resistance at 23,800 will act as a key hurdle," he said.
With a strong bullish candle, the index has confirmed its falling wedge formation breakout but with the Union Budget announcement tomorrow, there could be high volatility, according to Aditya Gaggar, director of Progressive Shares. "The undertone will remain positive with the downside being protected at 23,400, while on the higher side, 23,740-23,860 will be considered as a strong resistance zone," he said.
The Bank Nifty index settled positively at 49,587. Yedve noted the technical front; the index formed a green candle, indicating strength but is nearing a major hurdle at the 49,650-49,700 zone. "If it sustains above this level, a rally toward 50,500 could follow. Hence, a breakout above 49,700 is crucial for further upside. On the downside, 21-DSMA is placed near the 49,100 level, which will act as key support for the index," he said.
FII/DII Activity
Foreign portfolio investors stayed net sellers of Indian equities for the 21st straight session on Friday, while domestic institutional investors were net buyers for the 32nd consecutive session.
FPIs sold stocks worth approximately Rs 1,189 crore and domestic institutional investors mopped up equities worth Rs 2,232.2 crore, according to provisional data from the National Stock Exchange.
F&O Action
The Nifty February futures were up 0.94% to 23,639, at a premium of 130.6 points, with the open interest up by 2.77%.
The open interest distribution for the Nifty 50 Feb. 6 expiry series indicated most activity at 21,200 call strikes, with the 21,200 put strikes having maximum open interest.
Market Recap
The Indian equity benchmark indices closed higher four days in a row, but extended its monthly losing streak.
The NSE Nifty 50 ended 260.05 points, or 1.12% up at 23,509.55, and the 30-stock BSE Sensex ended 740.76 points, or 0.97% higher at 77,500.57.
The NSE Nifty Bank also closed higher at 49,587.20, up 0.56%. The stock market will remain open on Feb. 1, on account of Budget 2025 that is set to take place.
Global Cues
Wall Street stocks ended the final session of the week lower, reflecting the US President's tariff anxiety. Donald Trump will impose levies on China, Mexico, and Canada this Saturday.
Stock markets in Asia will remain closed on Saturday, except in India, as the country gears up to unveil the 2025 budget.
Donald Trump said he would impose tariffs on a wide range of imports, including oil and metals, in the coming months. He expanded his tariff plans to hit out at China. He told reporters that the US would “be doing something very substantial”, with tariffs targeting the European Union.
The dollar rose on Trump's fresh threats. The dollar index — which tracks the greenback's performance against a basket of 10 leading global currencies — was 0.53% up at 108.37.
Stocks on Wall Street gave up gains after the benchmark indices climbed nearly 1%. The S&P 500 and the tech-heavy Nasdaq Composite fell 0.50% and 0.28%, respectively. The Dow Jones Industrial Average slipped 0.75%.
The Bloomberg Dollar Spot Index rose 0.4%. The yield on 10-year Treasuries advanced two basis points to 4.54%.
Money Market
The Indian rupee closed flat against the US dollar on Friday at 86.62. The domestic currency opened flat against the US dollar, starting at 86.63.
It had weakened by seven paise to close at 86.63 on Thursday, according to Bloomberg data. The rupee's weakness comes amid ongoing global economic concerns and market volatility.
