Trade setup for January 6: Top 15 things to know before the opening bell.

As we approach the trading session on January 6, 2025, several key factors are poised to influence market movements. Here's a comprehensive overview to guide your investment decisions:

1. Global Market Trends

U.S. Markets

👉The U.S. indices concluded the previous week on a positive note, with the NASDAQ and S&P 500 rising by 1.7% and 1.2%, respectively, driven by gains in technology stocks such as NVIDIA and Palantir Technologies. 

Asian Markets

👉In contrast, Asian markets exhibited a downward trend on Monday, with Japanese indices declining by over 500 points. Chinese and Hong Kong markets also traded approximately 1% lower, reflecting concerns over economic stimulus measures. 

2. Domestic Market Indicators

Previous Session Performance

The Indian markets experienced a nearly 2% decline on Friday, erasing the gains from the prior session. Foreign Institutional Investors (FIIs) reversed their buying trend, selling over ₹4,500 crore worth of equities. 

GIFT Nifty Futures

As of 7:56 AM, GIFT Nifty futures were trading at 24,198, indicating a potential 85-point increase for the NIFTY50 at the opening bell. 

3. Sectoral Insight

Banking Sector

 Monthly business updates from leading private sector banks suggest a slowdown in credit growth, which may impact investor sentiment in the financial sector. 

Technology Sector 

The tech industry remains a focal point, with companies like NVIDIA expected to make significant announcements at upcoming events, potentially influencing stock performance. 

4. Commodity Prices

Crude Oil

 International crude oil prices remained steady, with Brent crude trading at $76.5 per barrel. The commodity recorded a 4.5% increase during the first week of 2025. 

Gold and Silver

 Gold prices experienced a slight decline, while silver prices dropped by ₹100 in early trade, reflecting fluctuations in the commodities market. 

5. Technical Analysis

NIFTY50 Levels

The index faces resistance at the 20-day Simple Moving Average (SMA) levels of 78,060 and 23,690. A close above these levels could signal bullish momentum. 

Bank Nifty

Resistance is identified at 51,481, 51,662, and 51,955, with support at 50,895, 50,714, and 50,421. The index's performance will be crucial in determining market direction. 

6. Derivatives Market

Options Data

For NIFTY50, the highest call open interest is at the 25,000 strike, indicating resistance, while the 23,700 strike has significant put open interest, suggesting support. 

Put-Call Ratio (PCR)

The NIFTY's PCR has declined to 0.86, indicating a bearish sentiment among traders. 

7. Market Volatility

India VIX

The volatility index decreased by 1.44% to 13.54, suggesting reduced market volatility, which may provide some relief to investors. 

8. Institutional Investment

FIIs and DIIs

FIIs sold over ₹4,550 crore worth of equities on Friday, while Domestic Institutional Investors (DIIs) purchased equities worth ₹820 crore, indicating differing perspectives on market valuation. 

9. Global Economic Indicators

U.S. Employment Data

 The upcoming U.S. jobs report for December is anticipated to show an addition of 150,000 jobs, signaling potential slowing growth in the labor market. 

Chinese Economic Measures

The People's Bank of China has indicated plans to enhance financial stimulus by lowering rates and reserve ratio requirements to support the economy. 

10. Corporate Earnings

Upcoming Reports

Companies such as Delta Air Lines and Walgreens Boots Alliance are scheduled to release earnings reports, which will be closely monitored for insights into corporate performance. 

11. Geopolitical Factors

U.S. Tariff Policies

 The new administration's stance on tariffs, particularly concerning China, could have significant implications for global trade and market dynamics.

12. Currency Market

USD/INR

 Fluctuations in the USD/INR exchange rate will influence sectors with exposure to foreign exchange, affecting importers and exporters differently.

13. Regulatory Developments

SEBI Regulations

Any new guidelines or changes in regulations by the Securities and Exchange Board of India (SEBI) could impact market operations and investor strategies.

14. Market Sentiment

Investor Confidence

 Market sentiment appears cautious, with mixed signals from global and domestic indicators influencing investor decisions.

15. Trading Strategies

Cautious Approach

Given the current market volatility and mixed signals, a cautious approach with a focus on risk management is advisable for traders and investors.

In summary, the trading session on January