Nifty Outlook: Nifty broke its bullish momentum on Tuesday after two consecutive days of gains. During the entire trading session, the index was seen moving within a limited range and an atmosphere of consolidation was clearly visible in the market.
Then faster recovery with support
Nifty started the day on a weak note and the index fell to an intraday low of 25,904 in early trade. However, buying was seen near the strong support level of 25,900, which provided support to the market and Nifty made a sharp comeback from the lower level.
closing near the day’s high
Nifty showed a recovery of over 140 points from the day’s low and eventually closed near the session’s high. At the end of trading, the index closed at 26,027 with a slight decline of 19 points.
These stocks looked strong
IndiGo, Trent and Hindustan Unilever were the top gainers in Nifty. On the other hand, selling pressure was seen in M&M, Eicher Motors and ONGC and these shares were the big losers of the day.
Mixed attitude in sectors
Market movements were mixed on sectoral basis. Good strength was seen in media, FMCG and consumer durables sectors. On the contrary, auto, pharma and financial services sectors remained under pressure and proved to be the weak sectors of the day.
There was not much movement in the broad market. Nifty Midcap 100 closed marginally lower by 0.12 per cent, while Nifty Smallcap 100 saw a slight gain of 0.2 per cent.
Eyes will remain focused on global data
On the global front, investors will now keep an eye on important economic data coming from America. These include US Non-Farm Payrolls, Retail Sales, Unemployment Rate and Manufacturing PMI. These figures can give important indications regarding further growth and monetary policy.
What will be the market trend going forward?
According to Siddharth Khemka of Motilal Oswal, the market may remain in consolidation phase in the coming times. Volatility is likely to increase, especially in broader markets, due to lower trading volumes and uncertainty in the global macro environment as we move towards the end of the year.
Expert opinion on Nifty
Nagaraj Shetty of HDFC Securities says that the way Nifty is repeatedly testing the resistance zone, there is a possibility of a strong breakout above the important band of 26,000-26,100 in the short term. If the index settles above this zone, Nifty may move towards 26,300-26,400. At present, 25,900 is considered an important support on the downside.
According to Nilesh Jain of Centrum Broking, Nifty faced a hurdle at its 21-day moving average around 26,030, but despite this the index managed to close above the psychological level of 26,000. He said that the immediate support is at 25,900, while below this, the 50-day moving average near 25,770 forms the next support.
Jain believes that if Nifty moves decisively above 26,100, it may move towards 26,250. Overall, he says that the broad trend is still positive and as long as Nifty remains above 25,700, the strategy of ‘buy on dips’ will remain correct.
Short Term Bullish Breakout?
According to Nandish Shah of HDFC Securities, Nifty staying above 26,058 will confirm a short-term bullish breakout. If this happens, higher targets like 26,202 and then 26,330 may open for the index. In case of a decline, the level of 25,900 can act as short term support.
Rupak Dey of LKP Securities believes that at present Nifty can roam only in the range of 25,900 to 26,100. Any strong and sustainable move outside this range will dictate the future.
condition of bank nifty
Meanwhile, Bank Nifty ignored the initial weakness and showed gradual recovery and ended the day’s trading at 59,462 with a gain of 0.12 percent.
According to Sudeep Shah of SBI Securities, the zone of 59,500–59,600 can act as immediate resistance for Bank Nifty. If the index remains above this level, it may see a rise to 59,900 and then 60,200. On the downside, the zone of 59,100–59,000 is likely to provide strong support.
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