Introduction: Market Context for January 6, 2025

Indian equity markets entered the first full trading week of January with heightened volatility, profit booking at higher levels, and selective sectoral rotation. After a strong rally in the previous sessions, Nifty 50 and Bank Nifty witnessed mild corrective pressure, which is normal in a trending market.

According to Dhwani Patel’s market framework, the current phase should not be viewed as trend exhaustion but rather as short-term consolidation within a broader bullish structure. Both indices continue to hold above their critical moving averages, suggesting that dips may still attract buying interest.

This trade setup for January 6, 2025 focuses on:

• Index-wise technical structure
• Key support and resistance zones
• Options open interest positioning
• Put-Call Ratio dynamics
• India VIX behaviour
• Practical trading outlook for the session

Nifty 50 Technical Outlook (Spot: 26,250)

🔹 Key Resistance Levels (Pivot Based)

• 26,340
• 26,379
• 26,441

🔹 Key Support Levels (Pivot Based)

• 26,216
• 26,177
• 26,115

🔎 Price Action & Chart Structure

The Nifty 50 formed a bearish candle with minor upper and lower shadows, highlighting increased selling pressure and intraday volatility. However, the broader structure of higher top–higher bottom remains intact, indicating that the overall trend is still constructive.

Importantly, the index continues to trade comfortably above all major moving averages, with short-term averages still sloping upward. This indicates that the recent selling is corrective rather than trend-reversing.

Momentum Indicators

• RSI (58.79): Slight cooling from overbought levels but still above the neutral zone, signalling continued strength.
• Stochastic RSI (86.96): Mild decline but remains above signal line.
• MACD: Bullish crossover intact with histogram expanding, confirming trend continuation.

📌 Dhwani Patel’s View:
As long as Nifty sustains above 26,115–26,177, the broader bullish structure remains valid. A break above 26,340 can open the doors for fresh momentum.

Bank Nifty Technical Outlook (Spot: 60,044)

🔹 Key Resistance Levels (Pivot Based)

• 60,334
• 60,471
• 60,691

🔹 Key Support Levels (Pivot Based)

• 59,893
• 59,757
• 59,536

🔹 Fibonacci Levels

• Resistance: 60,496 – 60,980
• Support: 59,776 – 59,571

🔎 Price Action & Trend Assessment

Bank Nifty witnessed mild profit booking after a strong rally, closing marginally lower. Despite this, the index continues to hold above the upper Bollinger Band and a previously broken falling trendline, which has now turned into strong support.

The broader trend remains decisively bullish.

Momentum Indicators

• RSI (65.05): Healthy and well above the reference line.
• MACD: Strong bullish momentum with expanding histogram.
• Volatility: Limited downside risk unless key supports break.

📌 Dhwani Patel’s View:
Bank Nifty remains a leader index. As long as it stays above 59,700, bulls retain control. Breakout above 60,334 can extend the rally further.

Nifty Options Data Analysis

🔸 Call Options (Weekly)

• Maximum Call OI: 26,300 (1.79 crore)
• Followed by: 26,400 & 26,500

Call Writing Concentration:

• Heavy writing at 26,300, indicating resistance.
• Significant unwinding at higher strikes suggests profit booking by call sellers.

🔸 Put Options (Weekly)

• Maximum Put OI: 26,000 (1.71 crore)
• Followed by: 26,200 & 26,100

Put Writing Insight:

• Strong base created near 26,000.
• Unwinding at higher strikes suggests limited downside.

📌 Inference:
The options structure points towards a range of 26,000–26,400, with a bullish bias unless 26,000 breaks decisively.

Bank Nifty Options Data Analysis

🔸 Call Options (Monthly)

• Highest Call OI: 59,500
• Followed by: 60,000 & 62,000

Heavy call writing near upper strikes suggests supply at higher levels, but aggressive unwinding at lower strikes confirms strength.

🔸 Put Options (Monthly)

• Highest Put OI: 59,500
• Followed by: 59,000 & 60,000

Put writers continue to defend lower levels, indicating confidence in the uptrend.

📌 Inference:
Bank Nifty options positioning supports a buy-on-dip strategy.

Put-Call Ratio (PCR)

• Current PCR: 1.00
• Previous Session: 1.46

The sharp fall in PCR indicates reduction in excessive bullishness, bringing balance back into the system.

📌 Dhwani Patel’s Interpretation:
PCR normalization is healthy. Markets often move higher after such resets.

India VIX Outlook

• India VIX: 10.02
• Up 6.06%, crossing short-term averages

While VIX has risen, it remains well below the 12 zone, which is generally considered safe for equities.

📌 Conclusion:
Volatility is returning slightly, favouring stock-specific and selective index trades rather than aggressive leverage.

Trade Strategy Summary for January 6, 2025

🔹 Nifty 50

• Bias: Positive with consolidation
• Support Zone: 26,115 – 26,177
• Resistance Zone: 26,340 – 26,441

🔹 Bank Nifty

• Bias: Strong bullish
• Support Zone: 59,700 – 59,536
• Resistance Zone: 60,334 – 60,691

According to Dhwani Patel, traders should:

• Avoid chasing breakouts
• Focus on buying near supports
• Keep strict risk management

FAQs – Trade Setup for January 6, 2025

Q1. Is the Nifty trend still bullish?

Yes, despite short-term selling, the higher-high-higher-low structure remains intact.

Q2. Should traders be cautious due to rising VIX?

Slightly, but VIX below 12 does not indicate panic.

Q3. Is Bank Nifty outperforming Nifty?

Yes, Bank Nifty continues to show relative strength.

Q4. What is the key support for Nifty?

The 26,000–26,115 zone remains crucial.

Q5. Who should trade aggressively?

Only experienced traders with proper risk control.

Disclosure & Disclaimer

Dhwani Patel (SEBI Registration No: INH200008608) is a SEBI-registered Research Analyst.
All views are for educational purposes only. This is not investment advice. Please consult your financial advisor before trading.