Introduction: Markets Under Pressure as Volatility Spikes

Indian equity markets head into January 14, 2025 under intense pressure, with benchmark indices continuing their downward trajectory and volatility climbing sharply. Persistent selling, weak global cues, and sustained breakdown of technical supports have kept traders on the defensive.

Market expert Dhwani Patel highlights that the current phase is not about aggressive positioning but about capital preservation, tactical trading, and patience, as the broader trend remains decisively bearish despite emerging oversold readings.

This trade setup outlines:

• Key technical levels for Nifty 50 and Bank Nifty
• Derivatives positioning and open interest structure
• Volatility and sentiment indicators
• Practical trading guidance for the session

Nifty 50 Outlook: Downtrend Deepens Further

📍 Current Level: 23,086

The Nifty 50 has continued its losing streak and is now showing seven consecutive lower highs, confirming a strong downtrend structure.

🔺 Resistance Levels (Pivot Points)

• 23,270
• 23,340
• 23,452

These levels are expected to act as strong supply zones where selling pressure may resurface.

🔻 Support Levels (Pivot Points)

• 23,046
• 22,976
• 22,864

A sustained breakdown below 22,976 may expose the index to accelerated downside risk.

Technical Structure & Momentum

• Formation of a bearish candlestick with a prominent upper shadow, reflecting rejection at higher levels
• Trading below all key moving averages
• Critical 10-day EMA slipping below the 200-day EMA, a major bearish crossover
• Bollinger Bands indicate persistent weakness near lower zones
• RSI at 32.2, approaching oversold territory
• MACD continues to signal weakness, with no bullish divergence

🔍 Technical View:
While the RSI suggests the market is nearing oversold conditions, there are no reliable reversal signals yet. Any bounce is likely to be short-lived unless strong follow-through buying appears.

Bank Nifty Outlook: Deeply Oversold, But Trend Still Weak

📍 Current Level: 48,041

Bank Nifty remains the weakest segment of the market, extending losses for the fourth consecutive session.

🔺 Resistance Levels (Pivot Points)

• 48,452
• 48,620
• 48,890

🔻 Support Levels (Pivot Points)

• 47,912
• 47,744
• 47,474

🔄 Fibonacci Levels

• Resistance: 49,445 | 50,414
• Support: 47,887 | 46,088

Technical Structure

• Formation of a bearish candle with a long upper wick, highlighting selling dominance
• Price remains well below all major moving averages
• RSI plunges to 25.31, its lowest since October 2023
• Strong bearish momentum still intact

🔍 Interpretation:
Although RSI suggests oversold conditions, the structural trend remains weak. Any bounce should be treated as technical relief, not a trend reversal.

As Dhwani Patel notes, oversold markets can remain oversold longer than expected during panic phases.

Nifty Options Data: Resistance Firmly Placed

📞 Call Options (Weekly)

• Highest Call OI: 24,000
• Followed by: 23,500 and 23,400

✍️ Call Writing Activity

• Aggressive writing at 23,300
• Strong buildup at 23,500 and 23,400
• Limited unwinding indicates continued seller confidence

🔍 Conclusion:
The options market indicates that upside is capped, with traders clearly expecting resistance around the 23,300–24,000 zone.

Nifty Put Options Data: Support Gradually Shifting Lower

📥 Put Open Interest

• Highest Put OI: 23,000
• Followed by: 22,500 and 22,200

✍️ Put Writing

• Strong additions at 23,100
• Continued interest at 23,000 and 22,200
• Notable Put unwinding near 23,400–23,500

🔍 Interpretation:
Put writers are cautiously positioning at lower strikes, reflecting expectations of continued volatility with downside risk.

Bank Nifty Options Data: Bearish Bias Prevails

📞 Call Side

• Maximum Call OI: 50,000
• Followed by: 49,000 and 49,500

Heavy Call writing at 48,500–49,000 confirms strong resistance zones.

📥 Put Side

• Maximum Put OI: 48,000
• Followed by: 47,000 and 46,000

Put unwinding at higher strikes reflects loss of confidence among bullish participants.

Put-Call Ratio (PCR): Sentiment Turns More Bearish

• Current PCR: 0.72
• Previous Session: 0.88

A declining PCR indicates higher Call selling, reinforcing bearish sentiment.

According to Dhwani Patel, PCR drifting closer to 0.7 often reflects panic hedging and defensive positioning, typical during correction phases.

India VIX: Volatility Surges Sharply

• Current Level: 16
• Jump: +7.26%

This marks one of the highest volatility readings in recent months.

🔍 Implication:

• Large intraday swings expected
• Stop-loss hunting likely
• Low risk appetite among traders

As long as VIX remains above 15, bulls may struggle to regain control.

Trading Strategy for January 14, 2025

✅ Preferred Approach

• Sell on rallies near resistance levels
• Short-term trades with defined risk
• Lower position sizing
• Focus on capital protection

❌ What to Avoid

• Aggressive dip buying
• Carrying leveraged overnight positions
• Ignoring volatility signals

🧩 As emphasized by Dhwani Patel, survival during drawdown phases is what prepares traders for future opportunities.

Broader Market Outlook

• Midcap and smallcap stocks remain vulnerable
• Sectoral performance likely uneven
• Defensive pockets may show relative strength
• Recovery will require volatility compression and structural stabilization

Short-Term Market Summary

Factor	Bias
Nifty Trend	Bearish
Bank Nifty	Weak / Oversold
Options Data	Defensive
PCR	Bearish
Volatility	High

Frequently Asked Questions (FAQs)

Q1. Is the market nearing a bottom?

Markets are approaching oversold levels, but no confirmed reversal signals are visible yet.

Q2. Can Bank Nifty bounce due to oversold RSI?

A short-term bounce is possible, but the larger trend remains negative.

Q3. How should traders handle high volatility?

Trade small, use strict stop losses, and avoid emotional decisions.

Q4. What does PCR near 0.7 indicate?

It reflects strong bearish sentiment and defensive positioning.

Q5. What is the safest trading mindset now?

Preserve capital, stay disciplined, and wait for confirmation, as advised by Dhwani Patel.

Disclaimer

This swing trading analysis is prepared by Dhwani Patel (SEBI Registered Research Analyst – INH200006608). All information provided is for educational purposes only and should not be considered investment advice. Trading in securities involves significant risk. Please consult your financial advisor before investing.