Sensex Down 984 Points, Nifty at 23,559; Tomorrow Nifty Prediction

by Editor November 13, 2024

Tomorrow Nifty Prediction

Market Closes in the Red: What to Expect on November 14

The Indian stock market faced heavy selling pressure on November 13, marking the fifth consecutive day of declines for both the Nifty 50 and Sensex.

Profit booking at higher levels, inflation concerns, and selling in key sectors like metals and automobiles led to widespread losses across the market.

With the Nifty now down about 10% from its all-time high reached in late September, market participants are cautious about further downside, although there may be short-term opportunities for a rebound as the indices approach key support levels.

Market Recap: November 13, 2024

On November 13, the Sensex fell 984 points, or 1.3%, to close at 77,690, while the Nifty 50 lost 324 points, or 1.4%, settling at 23,559.

This marked a notable retreat from recent highs, continuing the ongoing correction from the all-time highs seen on September 27.

The broader market sentiment remained weak, with 3,180 stocks declining, 628 advancing, and 92 remaining unchanged by the close of the session.

Profit booking was evident across almost all sectoral indices, which closed firmly in the red. The biggest losers were in the auto, banking, metal, PSU banks, media, and real estate sectors, which collectively shed 2-3% during the day.

The BSE Midcap and BSE Smallcap indices also saw sharp declines, down 2.6% and 3%, respectively, signaling a broad-based sell-off beyond just the large-cap stocks.

Sectoral Breakdown:

Auto Sector: Stocks in the auto sector faced significant selling pressure, with key players like Mahindra & Mahindra (M&M) and Hero MotoCorp losing around 3-4%. Rising input costs, global economic uncertainty, and weak domestic demand continued to challenge the sector.
Metal Sector: The metal index, dominated by companies such as Tata Steel and Hindalco, also suffered losses, falling by around 3-4%. This was largely attributed to concerns over slowing global demand, particularly from China, which has been a major consumer of industrial metals.
Banking Sector: The banking index also came under pressure as investors chose to lock in profits from recent gains, especially in public sector banks (PSBs), which have been underperforming amid broader market weakness.
Real Estate: The realty sector was the hardest hit, with the realty index dropping by over 2.25%. Concerns over rising interest rates and weakening demand for residential real estate put further strain on the sector, especially with rising borrowing costs.

Despite the broad-based declines, some stocks bucked the trend, posting gains on the day. Britannia, Tata Motors, NTPC, Hindustan Unilever (HUL), and Asian Paints were among the handful of stocks that managed to register positive returns, driven by strong fundamentals or sector-specific tailwinds.

Technical Indicators:

The Nifty’s decline to 23,559 brought the index within striking distance of its crucial long-term support level at the 200-day Exponential Moving Average (DEMA).

This marks the first time in nearly five months that the Nifty has tested this key support level. Many market participants will closely watch whether this level holds, as a break below could signal further downside, while a bounce could provide short-term relief.

The Sensex, which also dropped to key support levels, mirrored the Nifty’s action and faces similar challenges.

Both indices have now seen significant declines from their recent peaks, and their technical patterns suggest that the market is entering an oversold condition.

Oversold markets often lead to sharp, short-term recoveries, although the overall trend remains weak.

Market Outlook for November 14, 2024:

Several analysts are cautious, suggesting that the market is oversold and may see a short-term rebound, though the broader trend remains negative.

Ajit Mishra, Vice President of Technical Research at Religare Broking, noted that while the Nifty tested its crucial 200-day moving average support, the overall market conditions are still unfavorable due to inflationary pressures and global macroeconomic concerns. Despite this, he pointed out that the combination of a major support level and oversold conditions could trigger a rebound from lower levels, especially if the market holds the 23,500 level. However, any recovery is likely to be selective, with certain stocks outperforming others. Mishra suggested that traders maintain a hedged strategy and closely monitor key levels for further directional cues.
Srikant Chauhan, Head of Technical Research at Kotak Securities, added that the market is currently oversold, and a sharp intraday pullback is likely if the support levels hold. However, he cautioned that while a recovery might materialize, it would be short-lived, as the broader trend remains weak. He pointed out that the bearish candlestick pattern on the daily chart suggests that the market could see further weakness, but any rallies from here would likely face resistance.

Key Support and Resistance Levels:

For the Nifty 50, the immediate support level is at 23,500, the 200-day Simple Moving Average (SMA). If the Nifty manages to hold above this level, it could see a recovery toward the 23,800-23,850 zone.

However, if the support is breached, further declines toward 23,380-23,350 could follow.

For the Sensex, the key support level is at 77,500, with the next level of potential downside coming in at 77,200-77,000 if the index breaks below this level.

On the upside, if the Sensex manages to recover, it could target 78,300-78,500 as potential resistance.

Sectoral Outlook for November 14:

Given the widespread declines across sectors, selective stock picking within individual sectors may be more effective in the short term.

Some sectors, such as consumer staples (e.g., HUL, Britannia) and power utilities (e.g., NTPC), may see relative outperformance, supported by stable demand and strong earnings visibility.

On the other hand, sectors like auto, metal, and real estate could continue to face selling pressure, particularly if global economic conditions worsen or domestic growth slows further.