Budget week: Volatility to rise; Sensex may swing in this 4,000-pt range

The Sensex needs to sustain above 77,000-mark for igniting a pre-Budget rally; Nifty daily chart shows that bearish momentum was showing some signs of tapering-off. India VIX likely to rise this week.

Investors need to brace for an action packed week ahead, with three major events likely to dictate the market trend. The US Fed meet outcome will be known on Wednesday night, followed by the monthly futures & options expiry on Thursday, and the Union Budget 2025 on Saturday.  This week will be a six-day trading week, with equity markets open on Saturday for a full-day trading session on account of presentation of the Union Budget 2025.  Last week, equity benchmark indices swung between zones and eventually ended in the negative zone for the third straight.  The BSE benchmark Sensex 30 hit a high of 77,337, and then slid to a low of 75,462 in the early part of the week. Thereafter, the index gyrated within that trading band, and finally ended the week with a loss of 429 points or 0.6 per cent at 76,190.  The NSE Nifty 50 index slipped below the 23,000-mark to hit a low of 22,977, and eventually settled with a 0.5 per cent loss at 23,092. This was the lowest close on the Nifty since June 2024.  Nifty Movers & Shakers  Among the Nifty 50 shares, Wipro was the top gainer, up nearly 14 per cent. Kotak Mahindra Bank, UltraTech Cement, Britannia Industries, Grasim, Tata Consumer Products, Eicher Motors, Tech Mahindra, Bajaj Finance and Infosys were the other major gainers - up 3 - 7 per cent each.    On the flip side, Trent tumbled nearly 12 per cent. Dr.Reddy's, SBI Life Insurance, Adani Ports, Tata Motors, Axis Bank, Bharat Electronics, Reliance Industries and Mahindra & Mahindra and ONGC slipped 4 - 7 per cent each.  Outlook for the week - Jan 27 - Feb 01, 2025  The India VIX (Volatility Index) indicates that volatility is likely to rise in the near-term. Key momentum oscillators are showing a positive divergence on the daily and weekly chart. The index that quotes around 16.75, if trades consistently above 17.50, can spurt to levels of 24 - 25 this week.  BSE Sensex  Current Level: 76,190  Support: 75,800; 75,200  Resistance: 77,050; 78,150  The Sensex has been making lower-lows in recent weeks, and on the upside the index seems to be facing consistent resistance above 77,000-mark. The monthly Fibonacci chart shows that sustenance above 77,000-mark holds the key for a potential pullback rally.  In case, the Sensex, manages to sustain above 77,000, the index can attempt a jump towards 78,150; above which a short-covering rally can be anticipated for an upside target of 79,300 - 80,000. On the flip side, sustained trade below 75,700, can trigger a fall towards 75,200 and 74,350 levels.  The weekly Fibonacci chart suggests a likely trading range of 75,150 - 77,250 for the BSE Sensex, with a likely upside extension towards 79,000. Interim support for the Sensex is placed at 75,800 - 75,550 - 75,350 levels; whereas resistance on the upside can be expected around 76,850 - 77,050.    NSE Nifty  Current Level: 23,092  Support: 23,000; 22,700  Resistance: 23,450  The Nifty is seen struggling below its short-term moving average - the 20-DMA (Daily Moving Average) for more than a month now. The 20-DMA at 23,450 remains the key short-term hurdle for the index.  However, among the key momentum oscillators, the ADX (Average Directional Index) is showing some signs that the strength in the present trend may be tapering off; meaning the bears may take some breather. As such, in case, the Nifty breaks above the 20-DMA, a sharp surge towards 23,800 level seems likely in the near-term.  On the downside, sustained trade below 23,000-mark, can trigger a fall towards 22,700. The long-term chart shows that the Nifty seems to be on course to test its 20-MMA (Monthly Moving Average) at 22,250; below which a major support stands at 21,500 levels.