Indian equity markets witnessed a sharp rise in selling pressure in the previous trading session, breaking a multi-day consolidation phase. Both benchmark indices — Nifty 50 and Bank Nifty — ended decisively lower, reflecting risk aversion among traders and investors. Rising volatility, weak technical structures, and aggressive options activity suggest that January 21, 2026, may remain challenging for short-term participants.
According to market analyst Dhwani Patel, the broader trend remains tilted towards bearish dominance, with limited relief rallies possible only at strong demand zones.
This detailed trade setup breaks down key levels, technical patterns, derivatives data, volatility cues, and actionable scenarios for the upcoming session.
Key Levels for Nifty 50 (25,233)
Resistance Levels (Pivot Based)
- 25,488
- 25,585
- 25,743
Support Levels (Pivot Based)
- 25,172
- 25,074
- 24,916
Technical Structure & Chart Formation
The Nifty 50 formed a long bearish candle on the daily chart, signaling a decisive breakdown after six days of sideways movement. The decline was backed by above-average volumes, confirming distribution rather than profit booking.
Key technical observations:
- Index is trading below the 20, 50, and 100-day EMAs
- Still holding just above the 200-day EMA, which now becomes a critical support
- Short-term averages are sharply trending downward
- 10-day EMA has crossed below 20 & 50-day EMAs
- 20-day EMA has now breached the 50-day EMA — a strong bearish signal
Momentum indicators:
- RSI at 29.27 → clearly in oversold territory
- MACD below zero line with bearish crossover
- Histogram weakness expanding, showing increasing downside momentum
🔴 Conclusion:
Despite being oversold, Nifty lacks confirmation of reversal. Any bounce is likely to face selling pressure near resistance zones.
Key Levels for Bank Nifty (59,404)
Resistance Levels (Pivot Based)
- 59,832
- 59,999
- 60,270
Support Levels (Pivot Based)
- 59,289
- 59,122
- 58,851
Fibonacci Levels
- Resistance: 59,842 | 60,105
- Support: 59,097 | 58,737
Technical Structure & Chart Formation
Bank Nifty mirrored the weakness seen in frontline indices and posted a long bearish candle with high volumes. The index slipped decisively below short-term averages and the midline of Bollinger Bands.
Key observations:
- Breakdown below short-term EMAs in a single session
- Bollinger Band midline violation
- RSI at 48.82 with a bearish crossover
- MACD below signal line with declining histogram
🔴 Conclusion:
Bank Nifty shows sustained weakness with limited upside momentum. Traders should remain cautious until price reclaims key moving averages.
Nifty Call Options Data (Monthly)
- Highest Call OI: 26,000 strike (1.31 crore contracts)
- Next major resistances:
- 25,500 strike (1.06 crore)
- 25,800 strike (66.69 lakh)
Call Writing Activity
- Heavy Call writing at 25,500
- Additional writing at 25,400 and 25,600
- No meaningful Call unwinding seen
🔴 Interpretation:
Call writers remain confident that Nifty will struggle to move above 25,500–26,000 zone.
Nifty Put Options Data
- Highest Put OI: 25,000 strike (77.36 lakh)
- Next key supports:
- 24,500 strike
- 26,000 strike
Put Writing Activity
- Maximum Put writing at 25,000
- Followed by 24,500 and 24,900
- Put unwinding seen at higher strikes like 25,600
🟡 Interpretation:
Put writers are cautiously defending 25,000, but confidence is lower compared to Call writers.
Bank Nifty Call Options Data (Monthly)
- Highest Call OI: 60,000 strike (18.34 lakh)
- Next resistance levels:
- 59,500
- 61,000
Call Writing
- Aggressive writing at 60,000
- Followed by 59,700 and 59,800
- Call unwinding at 59,500
🔴 Interpretation:
The 60,000 zone remains a strong overhead barrier.
Bank Nifty Put Options Data
- Highest Put OI: 59,500 strike (10.7 lakh)
- Secondary supports:
- 59,000
- 60,000
Put Activity
- Maximum writing at 59,000
- Unwinding at 59,500 and higher strikes
🟡 Interpretation:
Bank Nifty may attempt to stabilize near 59,000–59,500 zone, but downside risk persists.
Put–Call Ratio (PCR)
- Current PCR: 0.72
- Previous Session: 0.77
📉 A falling PCR indicates rising bearish sentiment and higher call writing relative to puts.
India VIX – Volatility Check
- India VIX: 12.73 (+7.63%)
- Trading above all major moving averages
- Approaching the 13–14 zone
⚠️ As per Dhwani Patel, sustained VIX above 13 could intensify market swings and deepen corrections.
Trade Strategy & Outlook by Dhwani Patel
For Nifty Traders
- Trend remains bearish
- Sell-on-rise strategy preferred
- Watch 25,170–25,070 zone closely for intraday reactions
- Breakdown below 25,000 could accelerate downside
For Bank Nifty Traders
- Resistance near 59,800–60,000
- Support near 59,000
- Range-bound to bearish bias unless strong reversal emerges
Risk Management Tips
- Avoid aggressive longs despite oversold RSI
- Keep strict stop-losses
- Reduce position size amid high volatility
- Avoid overnight carry unless trend confirms
What to Watch Next?
- Reaction near 200-day EMA on Nifty
- VIX movement above 13
- Any signs of short-covering at support levels
- Global cues & institutional flows
FAQs – Trade Setup for January 21, 2026
Q1. Is Nifty oversold now?
Yes, RSI below 30 indicates oversold conditions, but oversold markets can remain weak without reversal confirmation.
Q2. Is this a good time for fresh buying?
Only cautious, short-term trades near strong supports. Trend traders should wait.
Q3. What is the strongest resistance for Nifty?
25,500–25,585 zone based on options and pivot data.
Q4. How important is India VIX right now?
Extremely important. VIX above 13 can trigger sharp intraday moves.
Q5. What strategy suits Bank Nifty?
Sell on rallies near resistance until price structure improves.
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.
