Nifty Outlook: Nifty started the week with a record high for the second consecutive day. The level of 26,373 has now become a new record for Nifty. However, be it profit booking or some internal concerns, there seems to be a problem in keeping the index above 26,300.
Now let us understand from the experts how the movement of Nifty will be on Tuesday, January 6 and which levels will be important. But, first let us know what special happened in the market on Monday.
Weakness of heavyweight shares became a hindrance
The change in stance of the three big heavyweight stocks of Nifty on Monday was not helpful for the market. Reliance Industries showed decline after touching its record high. HDFC Bank shows weakness despite strong business update.
At the same time, IT stocks also remained under pressure as some negative recommendations and downgrades came ahead of the third quarter results season.
Most Q3 business updates remained strong
Barring a few names like Avenue Supermarts and Union Bank, most companies have had strong Q3 business updates.
Most banks, including HDFC Bank and underperforming Bandhan Bank, have recorded double digit loan growth for the second consecutive quarter. The updates of retail and FMCG companies have also been satisfactory for the last quarter.
The major concerns of the market are not over yet
Despite this, many concerns remain in the market. These include geopolitical conditions, uncertainty regarding the US-India trade deal, and FIIs continuing to be net sellers. Even though the selling figure of FIIs on Monday was not very large.
Apart from this, there are also concerns regarding valuations. Bernstein cited this as one of the reasons for downgrading the Indian market.
Which levels will be monitored on Tuesday?
Tuesday’s session is also the weekly expiry day of Nifty. On the downside, it will be important for the index to defend the level of 26,200, which Nifty defended on Monday. Staying above 26,300 on the upside will be considered an important signal for the market.
What are experts saying on Nifty
According to Rajesh Bhosale of Angel One, on the downside, 20-DEMA will be an important support zone for Nifty. It is around the low of the last two sessions at 26,100-26,070.
Whereas the range of 26,400-26,500 will act as a strong resistance, which is an untouched area till now. His advice is to view intraday declines as a buying opportunity.
Nagaraj Shetty of HDFC Securities says that Nifty is standing at important support levels according to the concept of ‘change in polarity’. He is hopeful that Nifty may show a rise from the support of 26,200-26,150 in the next one or two sessions. According to Shetty, the target of Nifty in the short term can be 26,700.
Special attention will be kept on Nifty Bank
On Tuesday, maximum focus is going to be on Nifty Bank. The fall in HDFC Bank also dragged down the shares of other lenders except CSB Bank. Nifty Bank slipped nearly 400 points from the day’s upper levels, but managed to save the 60,000 level on the downside.
According to the chart, the big picture of Nifty Bank still remains positive. The index has given a breakout from the falling trendline and remains above its short-term 10 and 20 day exponential moving averages.
According to Vatsal Bhuva of LKP Securities, bullish crossover is also visible in RSI. Their strategy is to buy on dips. Immediate support is considered around 59,700, resistance at 60,500, and positional support at 59,300.
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