Weekly Setup (30th Jan-3rd Feb)

NIFTY50
Nifty lost 2.35% this week and closed at 17604. The weekly chart shows that the index has formed a bearish candle and broken through a key support level of 17800 after being in a consolidation phase for nearly four weeks. During this time, the index moved sideways within a range of 17,800–18,300, but it saw a significant drop and closed below its previous low of 17,762. The major selling started on Wednesday following the release of a research report on Adani Group stocks, which also affected other sectors such as Banking, Energy, and Metals.
The market trend has changed to a downtrend as Nifty fell below its recent correction low of 17,661. If the index forms a bottom and stays above Friday’s low of 17,493 for three consecutive sessions, the market trend will be in neutral.
For the upcoming week, Nifty is expected to find its initial support level at 17,400 and its final support level at 17,100. Additionally, the major resistance level for the week is anticipated to be 18,250. Levels on both sides would depend heavily on sector-specific programmes/announcements, capital gains tax, etc. in the Union budget on Feb 1.

 

BANK NIFTY
This week, the Bank Nifty index experienced a decline of 5.09%. PSU Bank index saw an even larger decline of 9.66%. Likely due to the impact of Hindenburg Research's report on the Adani Group, as PSU Banks have a significant exposure to Adani's debt.
Prior to this, the Bank Nifty had been in a consolidation phase between 41,500 and 43,500 for the past five weeks. However, in the lead up to the budget announcement, the index broke through this support level and experienced a sharp decline.
The Bank Nifty index is likely to experience a level of support at 39600. This level may act as a barrier for the index to fall below. On the other hand, major resistance for the index will be at 41500.

 

Top Performing Sector of the Week

Nifty Auto 3.14% Up
- Sona BLW 10.7% Up
- Tata Motors 10.53% Up
- Bajaj Auto 10.2% Up

 

Worst Performing Sector of the Week

Nifty Energy 7.52% down
- Adani Transmission 26.43% down
- Adani Green Energy 24.77% down
- Reliance 4.31 % down

About the Author

Sagar Wadhwa

Sagar Wadhwa is a Senior Equity Research Analyst who is a key member of the research team at Univest. He has extensive knowledge and expertise in the stock market, financial analysis, and investing and uses this expertise to provide valuable insights to the research team.

Note – This channel is for educational and training purpose only & any stock mentioned here should not be taken as a tip/recommendation/advice

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