Trade Setup for January 28: Nifty manages to hold 25,000 but key hurdles lay ahead of Budget

The NSE monthly expiry session turned out to be a roller-coaster ride for the markets, with the Nifty witnessing a swing of nearly 300 points during Tuesday's trade. After a sharp sell-off on Friday, the benchmark index staged a strong rebound from the day's lows and closed near the session's high.

The Nifty opened on a weak note and slipped sharply in early trade, plunging 131 points within the first 15 minutes to an intraday low of 24,932.

The index then stayed range-bound and volatile for most of the session until around 2:30 pm, as traders remained cautious ahead of expiry.

Buying momentum picked up decisively in the final hour, with the Nifty rallying close to 250 points to hit an intraday high of 25,246. The index eventually settled 126 points higher at 25,175.

Adani Enterprise, Axis Bank, and JSW Steel led the gains within the Nifty pack, while M&M, Asian Paints, and Kotak Bank came under selling pressure and ended the session as the top laggards.

Sectoral performance was mixed. Nifty Metal, PSU Banks, and IT emerged as the best-performing sectors, while Media, Auto, and FMCG stocks underperformed and posted the deepest losses.

The rebound in benchmark indices also lifted broader markets, with the Nifty Midcap 100 rising 0.59% and the Smallcap 100 gaining 0.41%.

In the currency market, the rupee strengthened by 22 paise to close at 91.92 against the US dollar, supported by a softer dollar index and optimism around the landmark India-EU FTA.

However, gains were capped by month-end dollar demand and muted capital inflows, as traders stayed cautious ahead of the February 1, 2026, Union Budget.

Looking ahead, Siddhartha Khemka of Motilal Oswal expects markets to remain rangebound, tracking global developments and geopolitical cues.

On the domestic front, he believes stock-specific action will continue to be driven by the ongoing Q3 earnings season.

What do the Nifty 50 charts suggest?

The Nifty found support near the crucial 25,000 level and managed to reclaim its long-term 200-DMA on a closing basis. That said, the index is not out of the woods yet, as follow-through buying remains essential to confirm a trend reversal.

A decisive move above the 25,400 mark will be key to negating the prevailing bearish setup and establishing a sustainable upside.

Nilesh Jain of Centrum Broking expects the Nifty to oscillate within a broader range of 25,000 to 25,400 levels in the near term.

Nagaraj Shetti of HDFC Securities said the underlying trend of the Nifty appears to have reversed upwards from the support zone of 24,900. He sees the next key resistance around 25,500 in the coming sessions, while immediate support is placed near 25,150.

On the close, the index managed to stay above the 200-DMA. However, Rupak De of LKP Securities cautions that a follow-up move is required before turning constructive on the Nifty. Support remains firm at 24,900, and a breakdown below this level could invite fresh selling pressure.

On the upside, 25,500 continues to act as a crucial resistance zone. Until the Nifty decisively breaks above this level, a sell-on-rise strategy may remain relevant for traders.

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