Indian equity markets continue to remain under heavy pressure as selling intensity refuses to cool off. The previous trading session ended with high volatility, indecision at lower levels, and continued structural weakness, especially in the benchmark Nifty 50, which has now slipped decisively below its long-term averages.

According to market expert Dhwani Patel, the ongoing phase is a high-risk zone for aggressive traders, as volatility is expanding while price structures remain weak. Despite oversold conditions on momentum indicators, confirmation of a durable reversal is still missing.

This trade setup for January 22, 2026, presents a comprehensive breakdown of key support-resistance levels, technical formations, derivatives positioning, volatility cues, and strategic insights to help traders navigate the day prudently.

Key Levels for Nifty 50 (25,158)

Resistance Levels (Pivot-Based)

• 25,272
• 25,362
• 25,507

Support Levels (Pivot-Based)

• 24,980
• 24,891
• 24,745

Nifty 50: Technical Structure & Price Action

The Nifty 50 formed a small green candle with long upper and lower shadows, which visually resembles a doji-like pattern on the daily timeframe. While not a textbook doji, this formation clearly reflects indecision and heightened intraday volatility.

Key Technical Observations:

• Nifty has fallen below the 200-day EMA, a crucial long-term trend marker
• Index is now trading below all key moving averages
• 10-day EMA has broken below the 100-day EMA
• 20-day EMA has slipped below the 50-day EMA
• Price has moved below the lower Bollinger Band, indicating strong downside momentum

Momentum Indicators:

• RSI at 27.89, firmly in the oversold zone
• MACD below both zero and signal lines
• Histogram weakness continues to expand

🧠 Insight by Dhwani Patel:
Oversold readings alone do not guarantee a reversal. In trending markets, oversold zones can persist longer than expected, especially when volatility rises simultaneously.

Key Levels for Bank Nifty (58,800)

Resistance Levels (Pivot-Based)

• 59,289
• 59,564
• 60,011

Support Levels (Pivot-Based)

• 58,396
• 58,120
• 57,673

Fibonacci Levels

• Resistance: 59,356 | 59,612
• Support: 57,811 | 57,000

Bank Nifty: Technical Structure & Price Action

Bank Nifty printed a bearish candle with long wicks on both ends, pointing to strong volatility and sustained selling pressure.

Key Technical Observations:

• Index declined nearly 1 percent in a single session
• Slipped below the 50-day EMA
• Still sustaining above 100-day and 200-day EMAs
• Managed to hold 58,800 support and lower Bollinger Band on close

Momentum Indicators:

• RSI declined to 40.77, reflecting weakening momentum
• MACD remains in bearish crossover
• Histogram continues to deteriorate

🧠 Market View:
Bank Nifty is relatively stronger than Nifty but still vulnerable. A decisive breakdown below 58,500 could open deeper downside levels.

Nifty Call Options Data (Monthly)

• Highest Call Open Interest:
  • 25,500 strike – 1.13 crore contracts
• Other key Call OI levels:
  • 25,800 strike
  • 25,900 strike

Call Writing Activity:

• Maximum Call writing at 25,200
• Followed by 25,100 and 25,300
• No meaningful Call unwinding observed

📌 Interpretation:
Call writers continue to dominate, indicating strong resistance near 25,200–25,500 zone.

Nifty Put Options Data

• Highest Put Open Interest:
  • 25,000 strike – 88.66 lakh contracts
• Secondary support levels:
  • 24,500
  • 25,200

Put Writing Activity:

• Maximum Put writing at 24,700
• Followed by 25,100 and 24,900
• Put unwinding seen at higher strikes like 25,500

📌 Interpretation:
Put writers are attempting to build a base near 25,000, but conviction remains moderate due to rising volatility.

Bank Nifty Call Options Data (Monthly)

• Highest Call OI:
  • 60,000 strike – 19.03 lakh contracts
• Next key resistances:
  • 59,500
  • 60,500

Call Writing:

• Heavy writing at 59,000
• Followed by 59,500 and 59,400
• Call unwinding seen above 60,000

📌 Interpretation:
60,000 remains a major ceiling for Bank Nifty.

Bank Nifty Put Options Data

• Highest Put OI:
  • 58,500 strike – 8.7 lakh contracts
• Next support levels:
  • 58,000
  • 59,500

Put Writing:

• Maximum writing at 58,500
• Additional writing at 58,200 and 58,300
• Heavy Put unwinding at 59,500

📌 Interpretation:
58,500–58,000 zone is immediate support; below this, downside risk increases sharply.

Put-Call Ratio (PCR)

• Current PCR: 0.78
• Previous Session: 0.72

📈 A rising PCR suggests short-term improvement in sentiment, but values below 1 still reflect overall bearish undertone.

India VIX: Volatility Update

• India VIX: 13.78
• Day’s Gain: +8.25%
• Highest level since June 23, 2025

Volatility Insights:

• Short- and medium-term averages trending upward
• Elevated risk environment
• Typically rises ahead of Union Budget

⚠️ As highlighted by Dhwani Patel, sustained VIX above 13–14 significantly increases intraday risk and widens stop-loss zones.

Trade Strategy & Outlook by Dhwani Patel

For Nifty Traders:

• Primary trend remains bearish
• Avoid aggressive long positions
• Sell-on-rise strategy near 25,270–25,360
• Critical support at 25,000 and 24,890

For Bank Nifty Traders:

• Watch 58,800–58,500 zone carefully
• Resistance near 59,300–59,500
• Break below 58,500 can trigger faster correction

Risk Management Guidelines

• Trade with reduced position sizes
• Keep wider stop-loss due to high VIX
• Avoid overnight exposure unless hedged
• Focus on price confirmation rather than indicators alone

What to Track Next?

• Behaviour around Nifty’s 200-day EMA
• Volatility movement post budget-related cues
• Options buildup near key psychological levels
• Institutional flow direction

FAQs – Trade Setup for January 22, 2026

Q1. Is the market extremely oversold now?

Yes, RSI readings show oversold conditions, but strong downtrends can stay oversold longer.

Q2. Is buying advisable at current levels?

Only for very short-term traders near strong support, with strict stop-loss.

Q3. What is the biggest risk right now?

Rising India VIX combined with breakdown below long-term averages.

Q4. Which level is crucial for Nifty?

The 25,000 mark remains psychologically and technically important.

Q5. How should traders approach Bank Nifty?

Cautiously bearish with focus on support at 58,500.

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.