Market Ahead, January 21: All you need to know before the Opening Bell

Investors will continue to focus on corporate earnings for market direction in the short-term while the International Monetary Fund lowering India's growth forecast will also impact sentiment.

A total of 25 companies including Havells, Polycab, ICICI Pru Life, and Zee Entertainment Ènterprises Ltd. are scheduled to announce their results later in the day.

As for IMF, it lowered India’s economic growth forecast to 4.8 per cent for this fiscal year owing to the crisis in the non-banking financial sector and weak rural demand. It also cut the world’s growth estimate and blamed the slowdown in India for its move.

Besides, the oil and Rupee's trajectory, stock-specific action, and foreign fund flow will also affect investor sentiment.

Globally, the Bank of Japan's two-day meeting ends later in the day. According to reports, the central bank is expected to keep policy on hold.

Asian shares got off to a cautious start on Tuesday. MSCI’s broadest index of Asia-Pacific shares outside Japan was fractionally down 0.04 per cent. Moves elsewhere were likewise modest, with Japan's Nikkei down 0.1 per cent and South Korea up 0.04 per cent. SGX Nifty though traded with major cuts on Tuesday, suggesting a subdued start for domestic indices.

In commodities, oil prices rose to their highest in more than a week after two large crude production bases in Libya began shutting down amid a military blockade. As a result, Brent crude futures firmed 37 cents to $65.22 a barrel.

Back home, equity markets hit fresh record highs but later slumped nearly a per cent on Monday as investors booked profit and sold equities across the board. The S&P BSE Sensex ended the day 416 points lower at 41,529 while Nifty settled 128 points lower at 12,225.

The Nifty index has reversed well from the upper end of the rising wedge pattern which is a negative sign in the short term. The index has also provided a sell crossover on its hourly charts and with that the index seems to have reversed the trend in the short term. Traders should hence sell Nifty for the target of 11,990 with stop-loss at 12,350.

And, in the end, here's a stock idea by Anand Rathi Shares and Stock Brokers who recommend selling Tech Mahindra for the target of Rs 730 with stop-loss at Rs 797.