Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.
Nifty traded sideways throughout the day and formed an extremely thin-body candle with minor shadows on either side, indicating indecision. The index has not been able to deliver a strong follow-through move after hitting its all-time high, suggesting hesitation among buyers near the higher levels for the past two sessions.
After giving a downward-sloping trendline breakout on the weekly chart in mid-October, Nifty moved higher and later retested the trendline zone in early November, which then acted as support. Since that retest, the index has staged a steady recovery and has now closed in the green for three consecutive weeks.
RSI has turned flat over the past couple of sessions and the MACD slope has also moderated, indicating a brief pause in momentum. A strong follow-through move above the recent record highs could open the doors for a fresh leg of rally in the index.
Bank Nifty formed a Doji candle on the daily chart, signalling indecision among market participants. Following the trendline breakout on the weekly chart in early October, the index has moved up sharply, outperforming the Nifty index. The overall price structure remains positive with room for further upside. On the weekly chart, both RSI and ADX are in a rising mode. This typically indicates strengthening momentum and increasing trend strength, reinforcing the bullish undertone for the index
On the sectoral front, Nifty Auto and Pharma emerged as the top two sectoral gainers, gaining in the range of 0.6%. On the other hand, Nifty CPSE & Nifty Oil & Gas ended as the top sectoral losers. On the stock front, M&M and Adani Enterprise ended up as the top gainers, while HDFC Life & SBI Life emerged as the top two losers.
The Mid Cap Index staged a strong rebound candle from its 20-day EMA a couple of sessions ago but has moved sideways since, showing no strong follow-through. A decisive breakout above 61,250–61,300 could unlock further upside momentum.
The Small Cap Index saw sharp bounce from its 200-day EMA on 26th Nov but has since slipped back to the same crucial support zone. It must hold above 17,800–17,700 for the trend to stabilize and for any meaningful upward reversal to unfold.
The market breadth weakened slightly with the advance-decline ratio skewed in the favour of bears as a total of 313 stocks out of the Nifty 500 universe ended in red.
Nifty View
Looking at key levels, the zone of 26,300–26,350 zone is likely to act as an important resistance zone for the Index. Any sustained move above 26,350 could drive a fresh leg of rally in the index, potentially taking it higher towards 26550, followed by 26800. On the downside, the support is placed in the zone of 26,150-26,100.
Bank Nifty View
Looking at key levels, the zone of 59,900–60,000 zone is likely to act as an important resistance zone for the Index. Any sustained move above 60,000 could potentially taking the price higher towards 60,500, followed by 61,000. On the downside, the support is placed in the zone of 59,500-59,400.
