Trade Setup for January 30: Nifty positions itself for a move towards 25,500 ahead of Union Budget

The Nifty 50 extended its positive momentum for the third consecutive session on Friday, closing above the 25,400 mark after a highly volatile day of trade.

The first 45 minutes saw bears firmly in control, with the index slipping nearly 200 points immediately after the opening. However, post 10 am, the Nifty found support near its long-term 200-day moving average around 25,160 and staged a sharp reversal.

The index recovered almost 300 points from the day's low before settling 76 points higher at 25,418.

Among stocks, Tata Steel, Larsen & Toubro, and Axis Bank emerged as the top gainers on the Nifty, while Asian Paints, IndiGo, and SBI Life witnessed selling pressure and ended among the key losers.

Sectoral performance was mixed. Metal, private banks, and oil and gas stocks led the gains, while healthcare, FMCG, and pharma stocks bore the brunt of selling pressure and finished as the top sectoral losers.

Midcaps and smallcaps moved in line with the benchmark indices. The Nifty Midcap 100 and Nifty Smallcap 100 both ended the session higher by 0.20%.

Market sentiment found support from the Economic Survey for FY26, which projected India's GDP growth at 6.8-7.2% for FY27, providing a constructive macro backdrop ahead of the Union Budget.

Globally, the US Federal Reserve kept interest rates unchanged, in line with expectations. Markets are currently not pricing in another rate cut before the June policy meeting.

On the currency front, the cautious mood was reinforced as the rupee slipped to an all-time low of 92 against the US dollar in early trade, weighed down by steady dollar demand and a subdued global environment.

Adding to the concerns, Brent crude oil prices rose above $70 per barrel for the first time since September amid escalating tensions between the US and Iran.

Looking ahead, markets are expected to remain range-bound with stock-specific action dominating in the run-up to the Budget, said Siddhartha Khemka of Motilal Oswal.

Nagaraj Shetti of HDFC Securities said a sustainable move above 25,500 could open the next upside targets in the 25,800-26,000 zone, while immediate support is placed at 25,300.

Nilesh Jain of Centrum Broking expects volatility to persist ahead of the Budget, with the index likely to trade in a broader range of 25,100-25,600.

He added that the overall structure appears constructive, with the immediate resistance placed at the 100-day moving average near 25,600. A decisive breakout above this level would confirm a short-term bottom.

With Friday being the last trading session ahead of the Budget, relatively contained movement can be expected, said Rupak De of LKP Securities.

He said that 25,500 is likely to act as a crucial resistance, while immediate support is seen at 25,200. A break below this level could trigger a sharp decline.

According to Nandish Shah of HDFC Securities, the Nifty appears to have reversed its short-term bearish trend and could move higher towards the next resistances at its 20-day and 50-day exponential moving averages, placed at 25,568 and 25,712, respectively.

Sudeep Shah of SBI Securities said the 20-day and 100-day EMA zone of 25,550-25,580 will act as the immediate hurdle for the index.

Any sustainable move above 25,580 could extend the pullback rally towards 25,700, followed by 25,850 in the short term.