Sensex Gain 16 Points, Nifty at 24,641; Tomorrow Nifty Prediction

Tomorrow Nifty Prediction

Market Update: December 11 – Modest Gains in Rangebound Session; Prediction for December 12

Market Overview: The Indian stock market ended the trading day on December 11 with modest gains as the major benchmark indices, the Sensex and Nifty, posted slight upticks after a rangebound session.

Despite volatility within the day, the indices were able to close in positive territory, maintaining a cautious yet optimistic market sentiment.

The Sensex closed at 81,526.14, up by 16.09 points, or 0.02%, while the Nifty finished at 24,641.80, gaining 31.75 points, or 0.13%.

Both indices showed resilience, closing above key psychological levels despite limited movement during the session.

The market’s rangebound nature suggested that investors are awaiting a clear direction, potentially triggered by economic data, corporate earnings, or global cues.

In terms of market breadth, 2,053 stocks advanced, 1,772 stocks declined, and 109 stocks remained unchanged, pointing to a slightly positive market under the surface.

However, the volume and volatility were subdued, implying that investors were adopting a wait-and-see approach.

Sectoral Performance: Sectoral indices displayed a mixed performance, reflecting the ongoing consolidation phase in the broader market.

FMCG and Auto were among the standout sectors, benefiting from a combination of domestic demand, strong earnings expectations, and resilient consumption trends.

• FMCG: The consumer goods sector performed strongly, with investors betting on stable demand in both urban and rural markets. FMCG stocks are traditionally seen as defensive plays in uncertain markets, and this proved to be the case as companies in this space gained traction.
• Auto: The auto sector also showed strength, with certain companies reporting positive sales figures and improved outlooks. The strong recovery in vehicle sales and improving supply chain dynamics provided a boost to auto stocks, driving the sector higher.

In contrast, the PSU Bank sector struggled, recording a decline of approximately 1%. This weakness was primarily driven by concerns over asset quality, rising interest rates, and the slower-than-expected recovery in public sector banking stocks.

Media stocks also came under pressure, likely due to challenges in advertising revenues and increasing competition from digital media.

Midcap and Smallcap Indices: The BSE Midcap and Smallcap indices outperformed the benchmark indices, with gains of 0.27% and 0.38%, respectively.

These smaller stocks tend to be more volatile, but their outperformance suggests that investors are finding value in mid and small-cap names, particularly in sectors that are expected to see a strong recovery in the coming months.

Stock Performance: On the individual stock front, Trent, Bajaj Finance, Britannia Industries, Shriram Finance, and Bajaj Finserv emerged as the top gainers on the Nifty.

These stocks were buoyed by positive sentiment in their respective sectors, coupled with strong earnings potential and investor confidence.

Trent, for instance, has been a major beneficiary of the growth in the retail sector, while Bajaj Finance continues to attract investors with its strong consumer lending portfolio and solid growth prospects.

On the flip side, JSW Steel, Adani Ports, NTPC, SBI, and Axis Bank saw notable declines. These stocks, particularly in the heavy industry and financials sectors, are facing headwinds from rising commodity prices, inflationary pressures, and market volatility.

The decline in SBI and Axis Bank, in particular, reflects the broader pressure on banking stocks amid concerns about interest rate hikes and asset quality.

Technical Insights: According to Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan, the Nifty has been trading in a narrow range of 24,500-24,800 for the past several trading sessions.

This consolidation phase suggests that the market is awaiting a catalyst for a decisive breakout or breakdown.

The limited range trading indicates indecision among market participants, with neither bulls nor bears able to gain control.

Gedia notes that a breakout above 24,750 would signal the resumption of the uptrend, potentially driving the Nifty towards higher levels.

On the downside, 24,500 remains a crucial support level. A break below this level could lead to a further pullback in the market, potentially targeting the 24,000-23,800 region.

Support and Resistance Levels:

• Immediate Support: The 24,500 level is the key support zone for Nifty. If the index slips below this level, it could lead to further selling pressure and test the 24,200 level. As such, this level serves as a stoploss for long positions.
• Immediate Resistance: On the upside, the next significant resistance is seen at 24,750, which marks the upper end of the current range. A decisive move above this level could signal a resumption of the uptrend, with potential targets at 25,000 or even higher.
• Open Interest (OI) Analysis: In the derivatives market, strong Open Interest is building at the 24,500 Put and 24,600 Put strikes, indicating significant support at these levels. On the call side, the 24,700 and 25,000 strikes have seen substantial OI buildup, suggesting that these levels could act as formidable resistance points in the near term.

Market Sentiment: The Put-Call Ratio (PCR) for Nifty remains at 0.71, which is marginally below the neutral level of 1, indicating a slightly bearish sentiment in the market.

However, the market’s price action suggests that investors are cautious, awaiting a clearer signal before making significant moves.

Despite the slightly bearish sentiment in the options market, the rangebound action reflects a market that is neither strongly bullish nor bearish, but rather in a state of indecision.

Prediction for December 12: Looking ahead to December 12, the market is likely to remain in a rangebound phase unless there is a breakout or breakdown from the current levels.

Traders and investors should watch for a decisive move either above 24,750 or below 24,500, as this will provide direction for the next phase of the market’s movement.

• Bullish Scenario: If Nifty manages to break above 24,750, it could signal the continuation of the upward trend, with 25,000 and 25,200 as the next targets. Sectors such as Auto, FMCG, and IT are likely to outperform if the market resumes its bullish trend.
• Bearish Scenario: A breakdown below 24,500 could lead to increased selling pressure, with potential support at 24,200 and 24,000. In such a scenario, sectors like PSU Banks and Heavy Metals may come under additional pressure.

In conclusion, the market is currently in a consolidation phase, with mixed sectoral performance and a rangebound outlook.

Traders should remain cautious and focus on key support and resistance levels for potential trading opportunities.

Selective stock picking will be crucial, with sectors like Auto, FMCG, and IT offering some relative strength in a muted market.

The Nifty’s movement over the next few sessions will depend on whether it can break out of its current range, providing a clearer direction for the broader market.