Trade Setup for January 15: Is the Nifty bounce on Tuesday an opportunity to exit your longs?

After showing sharp weakness in the past three to four trading sessions, the Nifty 50 index opened with a gap-up on Tuesday and edged higher during the initial trades. However, pressure on select heavyweight stocks limited the recovery. Eventually, the index closed the day 90 points higher at 23,176.

A rebound in global markets and easing domestic CPI inflation provided respite to broader indices. While the Nifty and Sensex registered minor gains, the broader markets recovered half of Monday’s losses, which had wiped out ₹15 lakh crore of investor wealth.

Financial heavyweights, along with Adani Group stocks, lifted the Nifty, with Adani Group stocks seeing healthy gains of up to 18%.

All Nifty Bank constituents closed in the green. Select PSU banks, including Central Bank of India, UCO Bank, and Indian Overseas Bank, surged following news that the government had approved a ₹10,000 crore fundraising plan for five state-run lenders through the Qualified Institutional Placement (QIP) route. Apart from Bank of Maharashtra, the approved lenders include Punjab & Sind Bank, Indian Overseas Bank, UCO Bank, and Central Bank of India, according to sources cited by CNBC-TV18.

Tuesday’s session also saw Quadrant Future Tek shares making a strong debut on Dalal Street. The stock listed at ₹374 on the BSE, a 29% premium over its issue price of ₹290. On the NSE, the stock began trading at ₹370, reflecting a 27.59% premium over the issue price.

Nagaraj Shetti of HDFC Securities said that the near-term trend of Nifty remains weak and he expects this upside bounce could be a sell on rise opportunity around 23350 levels. Immediate support is at 23050 levels.

LKP Securities’ Rupak De said the Nifty remained choppy during the session, forming a bullish Harami Cross pattern on the daily chart.

“A bullish Harami pattern, especially after a significant correction, often signals a potential short-term recovery. The Nifty appears positive for the short term as long as it remains above 23,135. On the upside, it could move towards 23,400, and a decisive move above 23,400 may lead to higher levels,” he said.