Indian stock markets are poised for cautious trading on December 26, 2023, as benchmark indices are expected to remain range-bound, despite favorable global signals. With trading volumes low due to the holiday season and a lack of significant domestic catalysts, investors are leaning on technical indicators and specific stock opportunities.
Early trends from the GIFT Nifty suggest a muted start, with futures trading near the 26,143 mark, down 33 points from the previous close. The Indian markets were closed on December 25 for Christmas, and in the last session on December 24, both the Sensex and Nifty 50 experienced slight declines as investors took profits. The Sensex fell 116 points (0.14%), closing at 85,408.70, while the Nifty 50 dropped 35 points (0.13%) to settle at 26,142.10.
Market Recap and Sector Performance
The sentiment was subdued during the last trading session, with the Nifty Midcap 100 index declining by 0.6%. Conversely, the Nifty Smallcap 100 managed to gain 0.3%. Sector-wise, modest gains were observed in metals, real estate, and automotive sectors, while indices for Oil and Gas, Information Technology, and Pharmaceuticals recorded losses ranging from 0.4% to 0.7%.
Outlook for Sensex and Nifty 50
The Sensex is likely to continue trading within a narrow range. Immediate resistance is identified near 85,750, while a critical support zone exists at 85,300. Sustaining above 85,750 could pave the way for a rally toward the 86,000-86,200 range. Conversely, a drop below 85,300 may increase the likelihood of testing lower levels around 85,000.
Despite the ongoing consolidation, the Nifty 50 remains in a positive territory. A significant support area aligns with the 20-day moving average, within the 26,050-26,000 range. Should the index break above 26,300-26,350, it could enter a new phase of upward movement, potentially reaching new highs. A noteworthy resistance point is established at 26,200 due to aggressive call writing, while substantial put open interest at the 26,000 strike reinforces this as a key support level. Meanwhile, the India VIX has decreased by approximately 2% to 9.19, indicating reduced market anxiety and calmer expectations.
Bank Nifty Outlook
The Bank Nifty is anticipated to maintain its consolidation phase, creating a base in the 58,500-60,100 range in the upcoming weeks. Strength above last week’s high of 59,533 could signal a move towards its recent all-time high of 60,100. Key support is positioned between 58,300 and 58,600, where the 50-day EMA and recent breakout area converge. Resistance is observed around 59,550, and a breakout from this range will likely determine the next directional move for the banking index.
Investors are advised to remain vigilant and conduct thorough research prior to making any investment decisions. This article is intended for informational purposes only and does not constitute financial advice.