Sensex Gain 759 Points. Nifty at 24,131; Nifty Prediction for Monday
Nifty Prediction for Monday
Sensex-Nifty Close with Gains: Here’s How They Could Move on December 2
On the first day of the December series, Indian stock markets rallied, closing with significant gains as the Sensex and Nifty indices surged ahead.
The Sensex rose by 759 points, ending at 79,803, while the Nifty gained 217 points to finish at 24,131.
The Nifty Bank index also closed 149 points higher, settling at 52,056, reflecting a positive trend in banking stocks.
Meanwhile, the Midcap index climbed 92 points, closing at 56,393. Broad-based buying was observed across the sectors, with 26 of the 30 Sensex stocks and 43 of the 50 Nifty stocks advancing.
Despite these positive gains, certain sectors like realty and PSU banks experienced pressure, suggesting a mixed outlook for the market in the near term.
This rally, while encouraging, has sparked debate among market experts about its sustainability. Some caution that today’s gains could be nothing more than a short-term bounce, as several negative factors, including foreign institutional investor (FII) selling, are still not under control.
While investors may have been buoyed by the market’s positive movement, the general sentiment remains cautious, and experts are advising a wait-and-watch approach before taking further positions.
Sectoral Performance and Key Highlights
The day’s rally was led by stocks in the pharma, infrastructure, and energy sectors, which saw a notable uptick.
The auto and metal indices also closed in the green, suggesting optimism in these areas. However, the real estate and public sector bank stocks faced selling pressure, indicating that some parts of the market remain vulnerable to broader economic concerns.
In terms of sector-specific performance, the pharmaceutical sector has been gaining momentum due to rising demand for healthcare and related services, especially in the post-pandemic world.
Infrastructure stocks benefited from government initiatives and robust project pipelines, while energy stocks found favor with expectations of rising demand and potential policy support.
However, the continued underperformance of the real estate and PSU bank stocks indicates that investor sentiment in these sectors remains subdued.
Real estate has been grappling with high-interest rates and liquidity concerns, which could impact the recovery of the sector.
Similarly, PSU banks are facing challenges related to asset quality and credit growth, making them less attractive to investors at the moment.
Expert Insights on Market Movements
Ajit Mishra, Vice President of Religare Broking, offered a cautious perspective on the market’s performance.
He noted that the rally on December 1 is likely a temporary bounce and not an indication of a long-term upward trend.
According to Mishra, many negative factors, particularly FII selling, are still at play, and these need to be addressed for a sustained recovery. Mishra believes that investors should wait for a clearer trend to emerge before making any further market moves.
He also pointed out that the IT and banking sectors are currently fairly valued, and any further weakness in these sectors could signal that bearish sentiment is dominating the broader market.
Mishra recommended that investors monitor these sectors closely and remain cautious, especially if the broader market fails to gain momentum.
Mishra has also identified key technical levels for the Nifty that traders and investors should keep an eye on.
According to him, if Nifty crosses the resistance level of 24,350, it could see a sharp rise to 24,700. On the flip side, if Nifty drops below the support level of 23,550, it could trigger a substantial market correction. These levels are crucial for determining the next move for the broader market.
Mandar Bhojane, Senior Analyst at Choice Broking, provided additional insights into Nifty’s immediate support and resistance levels.
He identified support zones at 23,800 and 23,680, which align with strong Fibonacci retracement levels.
These levels could serve as crucial points for trend reversal. On the upside, the immediate resistance for Nifty is seen at 24,350.
If Nifty manages to break above this level, it could head toward 24,800 and even 25,000 in the coming weeks.
Bhojane’s analysis indicates that Nifty is at a crucial juncture, where a move above 24,350 could open the door for a more sustained rally. However, a failure to break these levels could result in a pullback toward lower support zones.
Technical Indicators and Market Prediction
Hrishikesh Yedve, Associate Vice President of Asit C. Mehta Investment Intermediates, noted that Nifty opened flat but witnessed strong buying momentum throughout the day.
The index closed at a high of 24,131, and the India VIX, which measures market volatility, dropped by 5.12% to 14.43, signaling reduced market volatility.
Yedve pointed out that Nifty has regained the support of the 21-day exponential moving average (DEMA), a key technical indicator, and formed a green candle on the daily chart, indicating strength in the market.
From a technical perspective, Yedve observed that the immediate resistance for Nifty lies at the 24,350-24,360 range, which could act as a significant hurdle for the index.
On the downside, immediate support is located at 24,080, near the 21-DEMA. If the market fails to hold above this support level, it could slide towards the 200-day exponential moving average (DEMA), which stands at 23,570.
As long as Nifty remains below 24,360, Yedve advised traders to consider profit booking on the rallies and await a fresh breakout.
Bank Nifty: Cautious Outlook Amid Volatility
Turning to the banking sector, Yedve noted that Bank Nifty opened with a positive trend but faced some volatility during the day.
After consolidating within a narrow range, the index closed at 52,056, showing a positive bias. Technically, Bank Nifty formed an insider bar candle on the daily chart, signaling indecision in the market.
Additionally, a doji candle was formed on the weekly scale, indicating uncertainty about the market’s direction in the coming days.
Bank Nifty is currently facing strong resistance near the 52,500-52,600 range, and this level will be key in determining the next move for the index.
On the downside, the 21-day exponential moving average (DEMA) at 51,540 will act as immediate support.
Traders are advised to book profits on any rallies and wait for a fresh breakout above 52,600, as this could signal a more sustained uptrend in the banking sector.
Final Remarks: Watchful Waiting
As we approach the second day of the December series, the market’s outlook remains cautiously optimistic.
While there has been a notable bounce in the indices, broader economic concerns, particularly FII selling and sector-specific challenges, continue to loom over the market.
Technical levels will be crucial in determining the short-term direction of the market, and traders are advised to remain vigilant.
The key levels identified by experts—such as 23,550 on the downside and 24,350 on the upside for Nifty, as well as 52,500-52,600 for Bank Nifty—will serve as crucial markers for the next move.
Until these levels are decisively breached, the market is likely to remain in a range-bound phase, with traders focusing on profit booking and awaiting a fresh breakout or breakdown.
In summary, while the market shows short-term strength, a cautious approach is warranted, as many uncertainties still remain.
Traders and investors should stay focused on the critical technical levels and be prepared to adjust their strategies as the market develops further.
