Nifty 50 Analysis: Key Levels and Trends for January 2025

The Nifty 50 Index has experienced notable downward momentum recently, currently trading at 23,581, marking a 1.77% decline. Here’s a breakdown of the technical outlook:

Channel Trends

• Descending Channel: The index is trading within a downward sloping channel (blue). It has respected both the upper and lower trendlines, suggesting the bearish trend remains intact for now.
  
• Broader Structure: The yellow trendlines highlight the long-term rising channel. Nifty remains well above the lower support of this broader channel, indicating a potential cushion if the selloff deepens.
  

Key Fibonacci Levels
The Fibonacci retracement and extensions indicate critical zones:

• 1.618 Level: 23,112, acting as immediate support.
  
• 3.618 Extension: 22,444, a deeper bearish target in case of further selloff.
  

Support and Resistance

Immediate Resistance:

• 24,791 (upper channel boundary).
  

Critical Supports:

• 23,112 (1.618 extension).
  
• 22,444 (long-term support).
  

Volume Analysis
Significant volume spikes are observed during major selloffs, suggesting heightened institutional activity. A continuation of higher volume at lower prices may signal capitulation or accumulation.

Outlook

• Bearish Continuation: As long as Nifty trades within the descending channel, expect further downside with supports at 23,112 and 22,444.
  
• Bullish Recovery: A breakout above 24,791 may signal a reversal, leading to potential upside targets near 26,000.