Nifty 50 Ends Two-Day Winning Streak: What’s Behind the Sudden Decline? Could the Market Be Heading for a Major Correction?

At the close, the Nifty 50 was at 24,194.50 down by 0.11%

Nifty 50 had a bumpy ride on November 26, starting strong but ending on a slight downward note, closing at 24,194.50, down by 0.11%. The index reached an intraday high of 24,343.30 but saw a sell-off in the latter part of the session, snapping its two-day winning streak.

Despite a gap-up opening, the market quickly turned red, with traders opting for profit-booking after the recent rally. In the final hour, buying activity helped Nifty recover from its day’s lows, but the overall sentiment remained subdued.

Bearish Signs on the Horizon?

Technically, Nifty50 has formed a bearish belt hold pattern, signaling a potential shift towards weakness. Moreover, the RSI shows signs of hidden bearish divergence, which adds to the caution for short-term traders. A Bearish Marubozu candlestick has formed, which typically suggests a temporary pause in momentum.

If the index starts correcting further, there is a possibility that it could form the right shoulder of an Inverted Head and Shoulders pattern, signaling a potential reversal in the future.

Resistance and Support Levels to Watch

In the short term, 24,350 is proving to be a strong resistance level for the Nifty50. The index has struggled to break above this level in recent sessions. On the downside, the 21-day exponential moving average (DEMA) is positioned near 24,070, offering immediate support. If this level holds, Nifty might resume its upward momentum. However, if it breaches 24,070, psychological support around 24,000 could come into play.

Mixed Global Cues Impact Market Sentiment

The market’s cautious stance comes amid weak global cues. Concerns over US President-elect Donald Trump’s tariff threats on Mexico, Canada, and China weighed heavily on investor sentiment globally. Asian markets, including Seoul, Tokyo, and Shanghai, closed lower, while European markets also traded in the red. However, US markets closed higher on Monday, offering a mixed outlook for global equities.

Banking and IT Lead the Charge – But Broader Participation Needed

While banking and IT stocks remain the primary drivers, broader sector participation will be key for a sustained move beyond 24,350. Investors are waiting for a clear directional trigger, with the upcoming monthly derivatives expiry adding an element of uncertainty.

FIIs Turning Net Buyers

On a positive note, Foreign Institutional Investors (FIIs) have turned net buyers, breaking a long selling streak, especially with the MSCI rebalancing. As state elections conclude, all eyes are now on the government’s next moves, especially regarding execution plans and the upcoming budget.

Volatility on the Rise – India VIX Shows Uncertainty

The India VIX, a key measure of market volatility, rose slightly by 0.02%, closing at 15.3050, reflecting heightened market uncertainty. The derivatives market shows the highest call open interest at 24,500 and 24,700, indicating potential resistance levels in the short term.

Outlook for Nifty: Consolidation or Breakout?

While the short-term trend remains positive, with a “buy-on-dips” strategy favored by traders, Nifty remains range-bound between 24,070 and 24,350. A decisive move above 24,350 could lead to a sharp rally, but until then, traders should focus on booking profits and waiting for a breakout beyond these key levels.

In conclusion, after the two-day rally, Nifty faces critical levels of resistance and support. The market’s range-bound movement continues, but broader participation and a clear directional trigger are needed for a sustained move either way. The next few days could determine whether Nifty50 moves past the resistance or faces further consolidation.

Bank Nifty: Down by 0.03%

The Bank Nifty began the session in the green, signaling a positive start. However, as the day progressed, it lost momentum, ultimately closing at 52,191.50, down by 0.03%. Similarly, the BSE Sensex also closed in the red, finishing at 80,004.06, down by 0.13%.

In the sectorial front, The IT sector stole the spotlight today, rising by an impressive 1.07%. Within this space, LTIMindtree Ltd. led the charge with a gain of 1.68%, followed closely by Infosys Ltd., which climbed 1.61%. While IT soared, the Auto sector struggled, emerging as the top loser of the day with a decline of -1.28%. Heavyweights like Bajaj Auto Ltd. suffered a steep drop of -2.87%, and Tata Motors Ltd. slid by -1.56%.

Foreign Institutional Investors (FII/FPI) showed a net buying interest on November 26, with a buy value of Rs. 10,971.18 crore and a sale value of Rs. 9,813.48 crore, resulting in a net buying of Rs. 1,157.70 crore.

Domestic Institutional Investors (DII) were in net selling mode, with a buy value of Rs. 8,406.15 crore and a sale value of Rs. 10,317.01 crore, resulting in a net selling of Rs. 1,910.86 crore.

Bank Nifty

The Nifty Banking sector had some gainers and some losers for the day.

The gainers included Punjab National Bank with a 0.95% increase, Canara Bank with a 0.71% increase, IndusInd Bank with a 0.60% increase, IDFC First Bank with a 0.59% increase, and ICICI Bank with a 0.30% increase.

On the other hand, the biggest losers in the sector included Axis Bank with a 1.09% decline, State Bank of India with a 0.73% decline, AU Bank with a 0.64% decline, and Kotak Bank with a 0.46% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 26th November, 2024

Stocks Highlights

Shriram Finance Ltd. has caught the attention of many investors today, with a share price jump of 3.26%, soaring to Rs 3,044.00 from the previous close of Rs 2,947.80. But is this a genuine bull run or just a blip in the market?

🔍 Intraday Fact Check: Over the past 20 years, only 3.35% of trading sessions saw intraday gains of more than 5%. So, while the current move is positive, history has shown that big moves like this don’t come often.

🚀 Buy Signal Alert: The bulls are gaining steam! The 10-day moving average crossover appeared yesterday — a signal that’s been followed by an average price gain of 3.67% within just 7 days over the past 5 years. Could this be the beginning of a steady climb?

📈 Stock Returns vs Nifty: The stock has outperformed the Nifty 100, delivering a 103.76% return over the last three years, compared to just 38.04% from the index. Is Shriram Finance Ltd. on a winning streak? The numbers say yes, but the market can be unpredictable.

⚠️ Important Fact: The company has spent 42.67% of its operating revenues on interest expenses and 9.54% on employee costs for the year ending March 31, 2024.

Adani Enterprises Ltd. has dropped by -4.02%, bringing the last traded price down to Rs 2,166.85 from Rs 2,257.50. But the real question is — what does this mean for the stock’s future?

🔍 Intraday Fact Check: The stock’s performance has been sluggish, with only 4.65% of trading sessions in the past 20 years showing intraday gains of over 5%. This signals that large intraday moves are rare, so today’s drop may just be a symptom of a bigger trend.

📉 Topline Contraction: Sales fell by 28.87%, marking the first revenue contraction in 3 years. Can the company rebound, or is this the beginning of a bigger downward spiral?

⚠️ Sell Signal? The weekly stochastic crossover appeared on Nov 22, 2024, signaling that the bears may be gaining control. Historically, this has been followed by an average price decline of -8.19% within 7 weeks. Is the worst yet to come?

📈 Stock Returns vs Nifty: Over the past 3 years, Adani Enterprises has delivered a 35.22% return, which is less than the 38.04% return from the Nifty 100. 

Advance Decline Ratio

Today, the advance-decline ratio was 1.33 and the market breadth was positive. The volatility index India Vix increased by 0.01 to settle at 15.31 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1578
Decliners – 1188
52Wk High – 76
52Wk Low – 37
High Band Hitters – 127
Low Band Hitters – 50
200d SMA – 23614
50d SMA – 24743
20d SMA – 24023

Top Gainers and Losers Stocks

The top gainers were Shriram Finance (+3.26%), Britannia (+2.20%), Asian Paint (+1.87%), BEL (+1.86%), and Infosys (+1.61%).

The top losers were Adani Enterprises (-4.02%), Adani Ports (-3.03%), UltraTech Cement (-3.03%), Bajaj Auto (-2.87%), and Sun Pharmaceuticals (-1.98%).

Top Gainers and Losers Sectors

The top gainer sectors were IT (+1.07%), FMCG (+0.84%), Media (+0.82%), Metal (+0.38%), and Consumer Durables (+0.15%).

The top losers sectors were Auto (-1.28%), Pharma (-0.97%), Oil & Gas (-0.50%), Financial Services (-0.05%).

SECTORS – NOTABLE ACTION
IT +1.07%
FMCG +0.84%
MEDIA +0.82%
AUTO -1.28%
PHARMA -0.97%
OIL & GAS -0.50%

Stocks Ban List

(SEBI) F&O ban list (AARTIIND close at +451.35), (GNFC close at +593.05), and (GRANULES close at +595.30) are not currently on the stock exchange.

A stock enters the Ban List if its MWPL is above 95%. Implying that, Ban List shows the Futures and Options (FnO) stocks whose combined open interest in all FnO contracts for a given period crosses 95% of Market-Wide Position Limit.

ABFRL, BANDHANBNK, SAIL, MANAPPURAM, and ABCAPITAL stocks has the possibilities of entrance in the ban list.

GNFC, and GRANULES stocks has the possibilities of exit from the ban list.

Daily Pivots

As per the above pivots data, 23900 to 24400 is the Nifty 50 trading range.

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This article is only for educational purposes and is not an investment advice.