Nifty Outlook: The stock market broke its four-day losing streak on Friday on the basis of strong global signals. Nifty closed near the day’s high and closed at 25,966 with a gain of 150 points. In this surge, more than 40 shares closed in the green, which brought relief to investors.
Now let us understand from the experts how the movement of Nifty will be on Monday, 22nd December and which levels will be important. But, before that, let us know what special happened in the market on Friday and which factors will be kept in mind now.
The picture of the week is still weak
However, despite Friday’s rise, Nifty closed with a decline for the third consecutive week on a weekly basis. The index slipped 0.31% for the week, which shows that market sentiment is not yet completely strengthened.
Sharp breakout seen on Friday
After trading in a limited range for the last few sessions, a sharp breakout was seen in Nifty on Friday. The index opened a gap-up of 96 points and extended the gains in early trade. After this, the market movement slowed down for some time, but the positive trend remained throughout the session. Due to this, Nifty was successful in giving a strong closing.
Which stocks had the most movement?
Among Nifty stocks, Shriram Finance, Max Healthcare and BEL closed with the biggest gains. Selling pressure was seen on HCL Tech, Hindalco and Kotak Bank and they were among the top losers of the day.
The market trend remained strong at the sectoral level also. All sectoral indices closed in the green. In this, realty, auto and healthcare sectors were the best performers and led the day’s gains.
Broader market wins
Broader markets once again outperformed the benchmarks. The Nifty Midcap 100 index rose 1.20%, while the Nifty Smallcap index gained 1.34%.
Rupee continues to strengthen
The Indian rupee strengthened for the third consecutive session and closed 97 paise higher at 89.27 against the dollar. This is the strongest closing level of the rupee since November 26.
The rupee was the best performing currency among Asian currencies on the back of strong corporate dollar inflows and return of risk appetite. Amid expectations of RBI activism in the market, the outlook for the dollar-rupee pair remains weak i.e. bearish in the near term.
Expert opinion on Nifty
According to Technical Analyst Nagaraj Shetti (HDFC Securities), if Nifty stands firmly above the important resistance zone of 26,000 to 26,050, then a rise to 26,300 can be seen in the near term. On the downside, the range of 25,800 to 25,700 will act as strong support.
Despite Friday’s rise, Nifty closed with a decline for the third consecutive week. During the week, the index found support near its 50-day moving average and recovered from there and managed to close above 25,900, which is considered a sign of relief for the market.
Still a big hurdle near 26,000
Nilesh Jain of Centrum Broking says that at present the biggest resistance for Nifty remains around the 21-day moving average at the level of 26,000. If the index gives a sustainable breakout above this level, short covering may be seen and Nifty may move towards 26,200.
Given the recent recovery and breakout above the falling trend line, Jain believes that the possibility of a ‘Santa rally’ cannot be ruled out in the coming week. However, in case of a decline, the level of 25,700 will remain a strong support.
Relief above 26,100, eye on 26,300
According to Osho Krishnan of Angel One, the zone of 25,850 to 25,800 can handle any intermediate downside. The level of 25,700 has remained a strong support for the last two weeks. On the upside, if Nifty gives a decisive breakout above the zone of 26,050 to 26,100, then the bulls will get a respite and the index may move towards the lifetime resistance zone of 26,300 to 26,325.
Bullish structure confirmation level
Nandish Shah of HDFC Securities says that if Nifty remains above 26,058, then the bullish pattern of ‘Higher Top-Higher Bottom’ on the daily chart will be confirmed. In such a situation, there will be signs of resumption of primary uptrend and the index may go from 26,202 to 26,330. On the downside, 25,726 has now become the nearest important support.
On further outlook, Rupak Dey (LKP Securities) said that the level of 26,000 will remain most important for the market in future also. If there is a strong breakout above this, Nifty may move towards 26,300, while the level of 25,900 will act as immediate support and this is considered to be the first line of defense of Nifty.
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