Trade Setup For December 26: The Nifty is up 17.5% for the year as the market enters the final week of 2023. From a low of 16,828 in March of this year, the index gained roughly 4,500 points during the next nine months.
Rarely does the index increase for the most of the week while yet reporting a weekly deficit. Last week, the Nifty experienced something similar. Last week, the index finished higher in three of the five trading sessions, but Wednesday’s dramatic sell-off ensured that it finished negative for the week, albeit barely.
The Nifty is up 17.5% for the year as the market enters the final week of 2023. From a low of 16,828 in March of this year, the index gained roughly 4,500 points during the next nine months. The approaching shortened week will also witness a dearth of involvement as most worldwide institutions celebrate the New Year. However, the IPO frenzy continues, with more offerings planned for the following week.
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Foreign investors, on the other hand, continued to be net sellers throughout Friday’s trading session, while domestic institutions were net purchasers in the cash market. The Nifty 50’s 20-Day Exponential Moving Average (DEMA) at 20,850–20,900 will continue to operate as a crucial support, and if violated, the index may experience a price decline. “Certain sectors like IT and selective pharmaceutical stocks can buck the trend and provide good trading opportunities in the short term,” he added.
According to HDFC Securities’ Subhash Gangadharan, the Nifty’s short-term trend remains bearish, despite the fact that it erased most of Wednesday’s losses. To reverse the current downturn, the index must cross the recent high of 21,593, with critical downside support at 21,232, he said.
However, Amol Athawale of Kotak Securities expects that the Nifty will continue to tumble until it is above 21,200, at which point it will collapse to 21,100. He expects the index to return to levels between 21,500 and 21,550 until the downside supports are met. While the Nifty 50 continued its downward trend, the Nifty Bank index lagged the benchmark after a few weeks of outperformance. The index fell 1.3% for the week and is now up 10% for the year.
The Nifty Bank has now made seven tries to break through the 48,000 barrier but has only succeeded once, suggesting heavy resistance. Despite selling pressure, the Nifty Bank managed to hold the critical support level of 47,400. If it fails to maintain those levels, it might go as low as 47,100, according to Kunal Shah of LKP Securities.
On the upside, the index’s immediate resistance is now at 47,700, above which it can rise to 48,000–48,200. According to Athawale of Kotak Securities, 47,000 remains a critical support for the Nifty Bank, over which it might advance to 48,000–48,300. A drop below 47,000, on the other hand, can drive the index down to 46,700–46,500 levels.
What do the F&O indicators mean?
December futures on the Nifty 50 gained 0.5% and 33% for the series. They are now trading at a premium of 52.95 points over their previous price of 95.35 points. Nifty Bank’s December futures, on the other hand, lost 6.3% in open interest and 40% overall. The put-call ratio of the Nifty 50 has increased to 1.18 from 1.11 previously.
NALCO has been added to the F&O ban list as of Tuesday’s session, while Manappuram Finance and RBL Bank have been removed. The F&O prohibition continues to affect Ashok Leyland, India Cements, SAIL, Balrampur Chini, Delta Corp, and Hindustan Copper.
Nifty 50 on the Call side for December 28 expiry
On the call side, open interest for the Nifty 50 strikes between 21,800 and 22,500 has increased for this Thursday’s weekly and monthly expiry, which also happens to be the last until 2023.
Nifty 50 on the Put side for December 28 expiry
On the put side, the Nifty 50 strikes between 20,800 and 21,400 have experienced an increase in open interest for the expiry on Thursday:
Here are some equities to keep an eye on ahead of Tuesday’s trading session
Reliance Industries
According to reports, the firm and Walt Disney have inked a non-binding term sheet to integrate the company’s Indian media holdings. Reliance has yet to respond to CNBC-TV18’s inquiry about the Disney India merger reports.
Infosys
A global client cancels a prospective $1.5 billion contract spread over 15 years. The Memorandum of Understanding was signed in September.
Paytm
According to the corporation, the AI-led change will result in a “slight” reduction in operations and marketing staff. According to the statement, the corporation will be able to save 10-15% on staff expenditures. The core business might gain 15,000 employees next year.
UPL
The board of directors has approved a rights offering to raise Rs 4,200 crore. The rights issue’s terms, including the issue price, entitlement ratio, record date, and time, will be determined in due course.
Anupam Rasayan
Signs a letter of intent (LoI) with a renowned Japanese multi-national chemical business valued at $61 million, or 507 crore. For a period of nine years, the LoI will supply new-age polymer intermediates.
United Spirits, Radico Khaitan and Som Distilleries
The Gujarat Government permits the use of alcoholic beverages in hotels, restaurants, and clubs offering wine and dine in GIFT City.
Adani Wilmar
Promoters want to sell up to 1.24% of their interest in the open market in order to meet the Minimum Public Shareholding requirement.
Biocon Biologics
Biocon Biologics partners with Sandoz to distribute Adalimumab BS subcutaneous injection and receives exclusive rights to promote, sell, and distribute the product in Japan.
Aurobindo Pharma
The US Food and Drug Administration issued ten observations for Aurobindo Pharma’s arm, Eugia’s East Windsor, New Jersey, manufacturing site. According to the company, the observations are procedural in nature and will be addressed within the time frame specified. The pre-approved examination took place between December 11 and 22, 2023.
Talbros Automotive
The board of directors has approved the sale of the full 40% stake in the JV business Nippon Leakless Talbros for Rs 81.8 crore.
PNC Infratech
Under the Bharatmala Pariyojana, the Unnao-Lalganj stretch of the new NH-31 receives a Provisional Completion Certificate (PCOD) 33 days ahead of schedule.
What do global cues suggest?
On Friday, US equities finished largely higher, with the S&P 500 achieving its eighth weekly gain in a row. This is the equity benchmark’s longest winning streak since 2017. The S&P 500 is now 0.9% off its record closing and 1.3% off its intraday high. The Dow Jones’ eighth-week gain was the best since 2019. The Core Personal Consumption Index increased by 0.1% last month and 3.2% year on year, in line with predictions. On Monday, the US markets will be closed in observance of Christmas.
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Also read: Weekly Market Update: The Bull Run Has Come To An End On D-Street, As Profit Booking Has Reached Fresh Highs, What Awaits Us?
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