Stock Market Prediction for Monday (Jan 05, 2026) | Nifty, Bank Nifty Levels & Market Insights

Hello friends! 👋

What a powerful start to the new year it’s been. Nifty and Bank Nifty pushed into fresh all‑time high zones, with Nifty closing near its record band and Bank Nifty sustaining comfortably above the 60k mark, backed by strong action in banking, metals and autos. Domestic participation remained solid and helped the market absorb global uncertainty, while overall sentiment stayed constructive despite elevated levels.​

Let’s walk through the weekly action, option chains, and an actionable trading roadmap for Monday and the week ahead.

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Weekly Stock Market Review

Nifty 50: The index hit a new lifetime high around 26,340 on Friday and ended the week with an all‑time closing high near 26,328, adding roughly 1% in the first week of 2026. Dips toward the 26,000 belt were consistently bought, keeping the broader uptrend intact and confirming the breakout continuation structure.​

Bank Nifty: Bank Nifty printed a fresh record high just above 60,100 on Friday and closed the day around 60,150, outperforming Nifty on the back of strength in large private and PSU banks. The index has been forming higher‑lows on the daily chart with 59,000–59,400 acting as a strong demand pocket throughout the week.​

Sensex: Sensex too scaled new peaks, ending the week near 85,760 with gains of about 0.7% on Friday, mirroring Nifty’s strength. Corrections remained shallow, and breadth stayed skewed toward advances, reflecting healthy underlying risk appetite rather than a narrow index rally.​

What Drove This Week

• DIIs continued to provide strong support, absorbing intermittent foreign selling and cushioning declines on intraday dips.​
• Sectoral flows rotated into metals, PSU banks, autos, media and oil & gas, while FMCG and IT saw profit‑taking phases.​
• Global cues were mixed, but optimism around India’s growth resilience and expectations of a supportive policy environment kept downside limited.​

Key Technical Levels & Market Bias for the Week Ahead

Use your latest EOD data to fill this table before posting (numbers below are based on current weekly structure and should be cross‑checked with your charts):

​Nifty: The 26,100–26,000 belt remains the pivotal demand zone; as long as the index holds above this pocket on a closing basis, the path of least resistance remains higher toward 26,350–26,500 and, eventually, higher extensions. A clean break and close below 26,000 could open the door for a deeper mean‑reversion move toward the previous breakout region closer to 25,800.​

Bank Nifty: Sustained trade above 59,400 keeps the structure firmly in higher‑high, higher‑low territory, with 60,500–61,000 acting as the next supply zone and potential magnet if momentum persists. Only a decisive close below 59,000 would suggest that bulls are losing near‑term control and could trigger profit‑taking toward lower supports.​

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Sector & Stock Performance Snapshot

Strong Sectors

Metals / PSU Banks / Autos / Media / Oil & Gas: Nifty Metal surged about 5.7% this week, emerging as the top sectoral performer, led by names like Hindustan Copper, SAIL, Jindal Steel, Tata Steel and JSW Steel with strong weekly gains. Nifty PSU Bank rose around 5%, while Auto, Media and Oil & Gas indices gained between roughly 3–4%, reflecting broad‑based cyclical participation.​

Weaker Sectors

FMCG / IT: Nifty FMCG and Nifty IT were the only major laggards, with FMCG sliding around 3.7% and IT dipping about 0.7% for the week. Within FMCG, ITC logged a sharp double‑digit decline, while stocks like Radico Khaitan and United Spirits also saw notable cuts, capping broader index upside.​

Noteworthy Action

• Leadership remained rotational rather than collapsing, pointing to a still‑healthy bull market instead of an exhaustion top.​
• Stock‑specific moves in midcap financials, select metal names, capital goods and PSU plays remained active hunting ground for momentum traders.​

Institutional Activity Overview

Foreign and domestic flows stayed divergent, but net impact remained supportive for the market:

FIIs: FIIs have been patchy to negative around the turn of the year, using strength to trim risk, with flows sensitive to US yields and global macro headlines. Their index futures positioning has oscillated between light short build‑up and covering, reflecting a cautious approach rather than outright capitulation.​

DIIs: Domestic institutions continued to be steady net buyers, backed by strong SIP and long‑only flows, and consistently absorbed FII selling, especially on intraday declines. This domestic bid has been a key reason for Nifty and Bank Nifty sustaining at record zones despite global uncertainty.​

Volatility (India VIX): VIX has remained in a relatively compressed band at the lower end of its historical range, creating a favourable environment for option writers but also implying that any surprise macro event can trigger a quick volatility spike.​

Option Chain & Market Sentiment

Note: Exact strike‑wise OI on NSE may shift slightly intraday; the zones below are derived from latest available near‑term (Dec) data around Friday’s close.

Nifty 50 Option Chain (Near‑term Dec series)

Before publishing, replace the zones below with the actual strikes and values from NSE:

• Max Call OI: Currently expected to be clustered slightly above spot, in the 26,400–26,500 zone, marking the immediate supply wall.​
• Max Put OI: Likely concentrated around the 26,200–26,100 band, indicating strong put writing and a well‑defended floor near the recent breakout base.​
• PCR (OI / volume): With the index at all‑time highs and active put writing, PCR is inferred to be around 1.4, suggesting a overbought market.​
• Max Pain: Expected to sit close to 26,200, where both call and put writers may prefer the index to gravitate if no fresh trigger emerges.​

Sentiment Takeaway – Nifty

The option chain structure reflects a “buy on dips, sell on spikes” environment typical of a bullish consolidation near highs. Put writers are likely to defend the 26,100–26,000 zone aggressively, while call writers are active in the 26,400–26,500 band, hinting at consolidation with an upward bias as long as support holds.

Bank Nifty Option Chain (Near‑term Dec series)

Again, update these with current NSE figures before posting:

• Max Call OI: Expected to be visible around the 60,500 and 61,000 strikes, acting as the immediate hurdle for a clean continuation breakout beyond 60k.​
• Max Put OI: Likely built around 59,500 and 59,000, underlining traders’ willingness to defend declines toward these zones as buy‑on‑dip opportunities.​
• PCR: Inferred to be slightly above 1, signalling a cautiously bullish stance but still leaving room for intraday swings if global cues wobble.​
• Max Pain: Estimated around the 59,500 region, suggesting a tendency for prices to oscillate around this mid‑range band if volatility remains contained.​

Sentiment Takeaway – Bank Nifty

The chain structure supports a continuation of the bullish trend, with options positioning indicating a preference for defending 59,000–59,500 on dips while managing supply near 60,500–61,000. Intraday whipsaws between these bands are likely as option sellers adjust around prominent strikes.

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IPOs, Corporate Actions & Upcoming Catalysts

IPO Radar: NSE’s IPO and upcoming‑issues pages show activity ramping up in January, with a cluster of SME IPOs such as Gabion Technologies India, Yajur Fibres and Victory Electric Vehicles lined up in the 6–9 January window. These issues are positive for risk sentiment and primary‑market activity, but individually are unlikely to move the benchmark indices materially on day one.​

Earnings & Stock‑Specific News: Near‑term earnings are dominated by smaller and midcap names such as Axita Cotton, Viji Finance and GM Breweries, while heavyweight result season picks up more meaningfully from mid‑January. Stock‑specific reactions around these prints can still create pockets of volatility in broader markets, especially where positioning is crowded.​

Macro & Policy – Current Week and Next:

• Discussions around India’s 2026 economic roadmap, trade strategy and pre‑Budget positioning continue to underpin a constructive longer‑term narrative.​
• Globally, markets will watch upcoming US data (jobs, inflation) and rate‑cut expectations from the Fed, which can influence FII flows and risk sentiment toward emerging markets like India in the coming week.​

Monday Market Prediction & Trading Strategy

The market heads into Monday with a constructive undertone, but with indices sitting at or near record highs, chasing gaps without a plan can be risky. The base case remains a rangebound‑to‑positive start with dips likely to be bought as long as the key supports defined above hold.​

Nifty Prediction & Trading Strategy

View: Bullish consolidation as long as the index sustains above the 26,100–26,000 support band.​

Plan:

• Look for intraday long opportunities on dips toward 26,100–26,000 with defined stops just below the lower band, aligning with the prevailing uptrend.​
• Trail profits on moves towards 26,350–26,500, where call‑writing and supply are likely to emerge; avoid aggressive fresh shorts unless there is a decisive close below 26,000 with broad‑based weakness.​

Bank Nifty Prediction & Trading Strategy

View: Strong bullish structure above 59,400, with 60,500–61,000 acting as the next hurdle and potential expansion zone.​

Plan:

• Use intraday dips towards 59,400–59,000 for staggered long entries with tight risk management and clear stops below 59,000.​
• Consider booking partial profits or hedging near 60,500–61,000 unless there is a decisive breakout with volume, in which case trailing stops can help ride any extension.​

Options Strategy (Educational)

Given the low‑VIX backdrop and range‑biased option chains near highs:

• Non‑directional traders can explore defined‑risk structures like iron flies or iron condors centred around the current max‑pain and heavy OI zones on Nifty (around 26,200) and Bank Nifty (around 59,500–60,000).​
• Directional traders may prefer debit call spreads on dips or put spreads on failed breakouts instead of naked options, to better manage theta and event risk at elevated index levels.​
• Position sizing and discipline remain critical; avoid over‑leveraging simply because volatility “looks” low, as any macro surprise can quickly re‑price options.

Note: These are analytical frameworks, not recommendations.

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Final Thoughts

Markets are rewarding disciplined traders who respect levels, position sizing and trend direction while punishing over‑aggressive entries at extremes. Let the market come to your levels, avoid emotional trades around headlines, and focus on executing your process consistently rather than hunting for hero trades.

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Disclaimer

This is educational content only—not investment advice, solicitation, or offer to buy/sell. Markets involve risks; always assess your finances, risk tolerance, and goals. Past performance isn't a future guarantee; opinions and projections may change without notice. No responsibility or liability for losses or damages from using this information. Consult a qualified financial advisor for personalized recommendations.