Sensex Down 105 Points, Nifty at 24,194; Tomorrow Nifty Prediction

Tomorrow Nifty Prediction

Indian Stock Market Closes in the Red: Insights and Predictions for November 27

Indian equity indices experienced a volatile session on November 26, closing in light red as the market faced mixed sentiments.

After a strong performance in the previous trading days, Nifty witnessed a correction, closing below the critical 24,200 level.

The Sensex ended at 80,004.06, marking a decline of 105.79 points or 0.13%. Meanwhile, the Nifty settled at 24,194.50, losing 27.40 points or 0.11%.

Despite a relatively high number of advancing stocks, there was overall market weakness, with 2,179 stocks gaining and 1,580 stocks declining. A total of 105 stocks showed no change.

The market was influenced by sector-specific performance, with key indices like Auto, Power, Pharma, and Oil & Gas sectors experiencing losses of 1-1.5%.

On the other hand, defensive sectors like FMCG, IT, and Metal performed relatively well, registering gains of 0.5-1%.

Among the top gainers on the Nifty were Britannia Industries, Asian Paints, Shriram Finance, Bharat Electronics, and Infosys.

These stocks showed resilience despite broader market concerns. In contrast, heavyweights such as Adani Enterprises, Adani Ports, UltraTech Cement, Sun Pharma, and Bajaj Auto were the top losers, reflecting broader market caution.

Sectoral Performance

Looking deeper into sectoral performance, the Auto sector witnessed a significant pullback, as global concerns regarding economic growth and higher raw material costs dampened investor sentiment.

The Power sector also faced headwinds, largely driven by concerns over energy prices and supply chain disruptions.

Meanwhile, Pharma stocks saw selling pressure, partly due to concerns over regulatory scrutiny in key export markets and rising input costs.

In contrast, the FMCG and IT sectors outperformed the broader market. The IT sector gained over 1%, supported by strong earnings reports and the resilience of large-cap tech stocks like Infosys and TCS.

As a defensive sector, FMCG stocks such as Britannia Industries and Asian Paints were in demand, reflecting investors’ preference for stable returns in uncertain market conditions.

Similarly, the Metal sector, which is often sensitive to global demand trends, managed to post modest gains, likely aided by firm commodity prices.

Technical Overview of the Market

Aditya Gaggar, Director at Progressive Shares, noted that the Indian markets began the day with positive momentum but soon succumbed to profit-booking and selling pressure.

After a strong rally in the past two trading sessions, the Nifty had reached overbought territory, prompting a correction.

Despite the morning strength, the market ended in the red, with Nifty closing at 24,194.50, reflecting a modest decline of 27.40 points.

Gaggar observed that Nifty 50 registered a bearish Marubozu candlestick pattern, indicating a potential short-term pullback in bullish momentum.

This pattern suggests that while the market showed some strength in the early part of the session, selling pressure dominated towards the end of the day.

Additionally, Gaggar pointed out the possibility of a hidden bearish divergence in the Relative Strength Index (RSI), which could signal further weakness in the near term.

Despite these signals of potential weakness, it’s important to note that it is still too early to definitively call a trend reversal.

If Nifty experiences further downward movement, it could form the right shoulder of an inverted head and shoulders formation, a pattern that typically signals a potential bullish reversal. Therefore, a cautious approach is advised until clearer signals emerge.

Support and Resistance Levels for Nifty

Technically, Gaggar suggests that the immediate support for Nifty 50 is around the 23,950 level. This area aligns with a bullish gap formed in earlier trading sessions, making it a significant support zone.

A break below this level could suggest a deeper correction, but the downside risk remains limited for now due to the market’s short-term bullish bias.

The key resistance level for Nifty stands at 24,350, which, if breached, could pave the way for a further rally.

A breakout above this level would signal the continuation of the uptrend, potentially leading to a stronger rally in the coming sessions. However, traders need to closely monitor how the index behaves around these critical levels.

Rupak Dey, an analyst at LKP Securities, also commented on the market’s range-bound nature over the past two days.

Nifty continued to oscillate between the 21 EMA (Exponential Moving Average) and the 55 EMA, indicating that the market is consolidating before deciding its next direction. Dey remains optimistic about the short-term trend, which he believes is still positive.

Dey recommended a buy on dips strategy for traders, especially given that Nifty continues to hold important support levels between 23,950 and 24,000.

According to Dey, traders should watch for a breakout above 24,500, as this would open the door for a strong rally in the days ahead.

If the index manages to hold above 24,350 and eventually break past 24,500, a sustained uptrend could take hold, lifting the index toward new highs.

Market Prediction for November 27

Looking ahead to November 27, there are several factors that traders should keep an eye on. First, the global economic and geopolitical backdrop remains fluid, with concerns about inflation, interest rates, and global economic growth.

These factors can cause short-term volatility in the market. Any significant developments in these areas could lead to sharp market movements.

Additionally, corporate earnings reports for the third quarter (Q3) of FY24 will continue to influence investor sentiment.

Strong results from blue-chip companies in sectors like IT, FMCG, and Metals could provide support for the index, while weaker-than-expected earnings from key sectors like Auto and Pharma could drag the market lower.

On the technical front, the Nifty 50 will likely continue to oscillate between its key support and resistance levels.

A breach of the 23,950 support would likely lead to further selling, while a move above 24,350 could trigger buying interest and push the index higher.

Traders should be prepared for potential volatility, especially as the market digests recent gains and looks for new catalysts to drive the next move.

Key Takeaways:

• Immediate Support for Nifty: 23,950 (aligning with a bullish gap)
• Immediate Resistance for Nifty: 24,350 (critical breakout level)
• Trading Strategy: Buy on dips in the short-term as long as the support levels hold, with a cautious eye on potential bearish signals.
• Market Sentiment: Mixed, with the potential for short-term volatility. Positive short-term trend, but traders should remain cautious about possible corrections and wait for clearer signals before taking aggressive positions.

In conclusion, while the market is currently in a consolidation phase, the short-term outlook remains positive.

Traders should focus on managing risk and keeping a close watch on key levels for potential breakouts or reversals.

The evolving global economic conditions and upcoming earnings results will be crucial in determining the direction of the market in the near future.