Stock Market Update: Nifty, Sensex, and Bank Nifty Set for Cautious Start

Indian stock markets are expected to open on a positive note on Tuesday, January 6, supported by Asian markets. The Gift Nifty pointed to an optimistic opening for Indian indices. At 26,392, it was quoted 76 points or 0.28% higher than the last closing of the Nifty futures.

On Monday, January 5, the indices closed in the red as they could not maintain the record highs. The Sensex lost 322 points or 0.38% to finish at 85,439.62; the Nifty 50 saw a decline of 78 points or 0.30% to end at 26,250.30.

Profit booking in heavyweight stocks, particularly banking and IT, weighed on the indices. The BSE Midcap index edged up 0.05%, and the Smallcap index gained 0.07%.

Sensex Outlook

The Sensex has currently entered a period of strong consolidation after it could not maintain its position near the peaks that it had recently reached. 

The 85,000-85,200 zone is acting as an important support. If the index remains in this range, then the main uptrend will probably remain.

On the other hand, the 85,800-86,000 area is a strong resistance area where selling has appeared in the last few days. A break above it may open the gates for new peaks.

Nifty 50 Outlook

The Nifty 50 index has witnessed short-term consolidation after it broke the 26,300 mark and settled around 26,250.

The support is found between 26,200 and 26,150, a strong supply area. A prolonged movement beneath this zone might cause a bigger correction back down to 26,000.

Conversely, resistance is at the 26,400-26,450 zone, where there is heavy call writing and selling pressure.

Momentum indicators like the RSI have dropped from their previous peaks, which means a moderation in the upside strength rather than a complete reversal.

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Bank Nifty and Sectoral Trends

After hitting new all-time highs, the Bank Nifty faced profit-taking, but managed to bounce back and settle above the 60,000 level. 

Resistance is located in the 60,300-60,400 range, and support is in the 59,700-59,800 area. 

The IT sector has been gaining momentum and using relative strength, while the metals and the auto sectors are showing a rise in momentum but are still waiting for confirmation through sustained strength.

Financial services and pharma have entered an improving phase, whereas infrastructure, PSU, and oil & gas stocks have seen a noticeable slowdown.

FIIs continue to hold net short positions, making their potential covering near all-time highs a key factor to watch.