Investors in Indian markets are preparing for cautious trading on December 26, 2023, as the benchmark indices are anticipated to remain within a narrow range. Despite supportive signals from global markets, local trading is likely to be characterized by low volatility, primarily due to holiday effects and a lack of significant domestic catalysts. The GIFT Nifty is currently trading at approximately 26,143, reflecting a decline of 33 points from the last close of the Nifty futures.
The Indian markets observed a closure on December 25 in observance of Christmas. On December 24, both the Sensex and Nifty 50 ended the session marginally lower, influenced by profit booking among investors. The Sensex dropped by 116 points, or 0.14%, concluding at 85,408.70. Meanwhile, the Nifty 50 fell by 35 points, or 0.13%, settling at 26,142.10, indicating a subdued market sentiment. The Nifty Midcap 100 index declined by 0.6%, while the Nifty Smallcap 100 managed to gain 0.3%.
Market Outlook: Sensex and Nifty 50
Looking ahead, the Sensex is expected to trade within a confined range. Immediate resistance is identified near 85,750, while significant support is observed at 85,300. If the index sustains above 85,750, it may trigger a rally toward the 86,000 to 86,200 zone. In contrast, a drop below 85,300 could increase the likelihood of testing lower levels near 85,000.
For the Nifty 50, the outlook remains cautiously optimistic despite ongoing consolidation. The 20-day moving average, which aligns with the 26,050 to 26,000 range, serves as a key support area. A breakthrough above 26,300 to 26,350 could signal the next phase of upward momentum and potential new highs for the index. Notably, there is considerable resistance at the 26,200 level due to aggressive call writing, while heavy put open interest at the 26,000 strike reinforces this as a robust support level. The India VIX has decreased by about 2% to 9.19, suggesting a calmer market environment.
Bank Nifty Analysis
The Bank Nifty index is also expected to continue its consolidation phase, forming a base within the 58,500 to 60,100 range in the forthcoming weeks. A move above last week’s high of 59,533 could pave the way toward the recent all-time high of 60,100. Critical support for the Bank Nifty is positioned at 58,300 to 58,600, where the 50-day Exponential Moving Average (EMA) coincides with a recent breakout area. Resistance is evident around 59,550, and a breakout from this range is anticipated to dictate the next directional movement for the banking index.
In summary, Indian markets are poised for a cautious trading day on December 26, with key levels to watch for both the Sensex and Nifty 50. Investors are encouraged to remain vigilant and attentive to technical indicators and market developments as they navigate this period of low volatility.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. As always, investors should conduct their own research before making any investment decisions.