Will Nifty finally break through the key levels, or will bears continue to control the market?

NiftyTrader • December 24, 2024

Post Views: 385

Index	Price	Change	% Chg
Nifty 50	23,727.65	-25.80	-0.11%
Nifty MidCap 50	15,926.80	-28.45	-0.18%
Nifty SmallCap 50	8,934.10	+40.35	+0.45%
Nifty Bank	51,233.00	-84.60	-0.16%
Nifty Financial	23,737.60	-47.95	-0.20%
BSE SENSEX	78,472.87	–67.30	–0.09%

At the close, the Nifty 50 was at 23,727.65 down by 0.11%

On December 24, Nifty 50 started on a positive note but faced significant selling pressure by the end of the day, closing 0.11% lower at 23,727.65. Despite an initial rise, profit booking in the second half erased all intraday gains. The index broke below its 200-DMA support level, a crucial point that could signal potential further declines or indicate that the market is consolidating before making a decisive move.

Could this dip signify a deeper correction, or is the market simply taking a breather before the next big move?

Key Highlights:
- Nifty closed below 23,850, signaling a potential consolidation.
- 200-DMA support broken, pointing towards bearish momentum.
- Immediate support at 23,500, resistance at 23,860.

Sector Performance: Winners and Losers

In terms of sector performance, the Auto and FMCG sectors stood strong, while Metals and PSU Banks struggled. This divergence highlights the potential of sector-specific opportunities, where certain industries might outperform despite the broader market’s struggles. Smallcap stocks ended the day in green, indicating there may still be pockets of growth in the market.

Key Observations:
- Auto and FMCG sectors saw positive movement, while Metals and PSU Banks underperformed.
- Smallcaps showed a slight outperformance, closing the day in green.

Bearish Indicators: A Deeper Decline Ahead?

The RSI crossover on the Nifty chart suggests a bearish outlook, while the formation of a small red candle points toward caution in the short term. After a reasonable decline, this formation could indicate an impending trend reversal, but only if confirmed by further movement. A decisive breakdown below 23,500 could lead to a test of lower levels like 23,300, while a breakout above 23,900 might signal a bullish reversal. Investors must remain vigilant and monitor key levels closely.

Actionable Insights:
- Watch for a break above 23,900 for a possible bullish reversal.
- If the index drops below 23,500, a further decline toward 23,300 could be in play.

Santa Rally: Will 2024 Be Different?

The Santa Rally, which typically sees a surge in stock prices from Christmas to New Year, has created a buzz in the market. However, with Nifty down by 9.77% from its September high, many wonder if this year will follow suit. In past years, the market has rebounded toward the year-end, but 2024 presents a different set of challenges. Global uncertainties, weak earnings reports, and the lack of Foreign Institutional Investors (FII) inflows create doubt about whether we’ll see the same year-end momentum.

Will the Santa Rally come to life, or is the market facing too many headwinds?

Key Data:
- 9.77% drop from September’s high.
- Nifty’s performance in December: -0.31% as of December 24.
- Past Santa Rallies were more successful, but this year could be different.

Global Markets and the Indian Rupee: What’s Impacting Sentiment?

Globally, stock markets saw mixed performances, with U.S. Treasury yields climbing while the Indian rupee hit a record low against the U.S. dollar. The rise in U.S. bond yields is causing concerns over inflation, adding more pressure on the Indian currency. Meanwhile, the oil prices have been edging higher, though trade remains thin due to the holiday season. These global factors could have a significant impact on both domestic sentiment and future market movement.

Key Highlights:
- The Indian rupee hit an all-time low, weakening against the U.S. dollar.
- U.S. bond yields increased, further affecting global and domestic sentiment.
- Oil prices saw an uptick, but market sentiment remains volatile.

F&O Expiry: What’s Next for Nifty?

With December 25 marking a market holiday, all eyes will be on the F&O expiry on December 26. The expiry is expected to bring more volatility and could set the stage for the next big move. The Nifty remains stuck within a range, with 23,700 to 23,900 acting as a consolidation zone. A breakout above or below this range could offer more clarity on the next trend direction.

Will the F&O expiry be a game-changer or just another blip in the market’s ongoing consolidation?

Key Triggers:
- The F&O expiry on December 26 will likely determine the next market move.
- Union Budget and Q3 earnings will be crucial for the market’s direction in early 2025.

Investor Strategy: Stay Cautious or Go for Growth?

As the market continues to oscillate within the 23,700 to 23,900 range, investors should adopt a cautious approach. While certain sectors like Auto and FMCG show promise, broader exposure should be limited until the market shows clearer direction. A decisive breakout or breakdown is needed before making significant moves. It’s essential to stay flexible and adjust strategies as the market evolves.

Tips for Traders:
- Focus on sectors like Auto and FMCG, where growth is expected.
- Wait for a clear breakout or breakdown to establish a long-term position.

Will Nifty finally break through the key levels, or will the bears continue to dominate?

As the year comes to a close, the market faces critical tests. Can the Santa Rally return, or is the market heading for more turbulence? Watch key levels closely as Nifty heads into the final week of 2024. The answers lie in the numbers, and the market could break either way at any moment!

Bank Nifty: Down by 0.16%

The Bank Nifty and BSE Sensex both experienced a difficult day, opening in the red and struggling throughout the session. The Bank Nifty was down by 0.16%, closing at 51,233.00, while the BSE Sensex also closed in the red, declining by 0.09% to end at 78,472.87.

In the sectorial front, the Automotive sector, gains stood out, with a notable rise of 0.57%. Among the key players, Bharat Forge Ltd. led the charge, soaring by an impressive 1.99%, while Tata Motors Ltd. followed closely with a 1.79% increase.

On the flip side, the Metal sector experienced a dip, emerging as the top loser of the day with a 0.83% decline. Specifically, Steel Authority of India Ltd. saw a significant drop of 1.93%, while APL Apollo Tubes Ltd. followed with a loss of 1.87%.

Foreign Institutional Investors (FII/FPI) continued their net selling position, with a net outflow of ₹2,454.21 crore. They bought ₹4,932.76 crore worth of stocks but sold a higher amount, totaling ₹7,386.97 crore.

Domestic Institutional Investors (DII) maintained their bullish stance, exhibiting a net buying trend. They bought ₹10,514.30 crore worth of shares and sold ₹7,695.05 crore, resulting in a net inflow of ₹2,819.25 crore.

Bank Nifty

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

The gainers included IDFC First Bank with a 1.10% increase, AU Bank with a 1.07% increase, Kotak Bank with a 0.27% increase, Axis Bank with a 0.25% increase, and Punjab National Bank with a 0.23% increase.

On the other hand, the biggest losers in the sector included State Bank of India with a 0.99% decline, IndusInd Bank with a 0.96% decline, Bank of Baroda with a 0.57% decline, Canara Bank with a 0.28% decline, and HDFC Bank with a 0.07% decline. These results suggest that some of the banking stocks performed better for the day.

Gold and Silver Rate (INR) 24th December, 2024

22 K Gold / g	₹ 7,090	– ₹10
24 K Gold / g	₹ 7,735	– ₹10
18 K Gold / g	₹ 5,801	– ₹8

Silver / g	₹ 91.40
Silver / kg	₹ 91,400

Rupee Hits Fresh Record Low: What’s Driving the Fall?

In a continuing downward trend, the Indian rupee has depreciated by 9 paise to settle at a fresh all-time low of 85.20 against the US dollar. This marks the second consecutive day of decline, as the rupee faces mounting pressures from both domestic and global factors.

What’s Behind the Rupee’s Slump?

Several factors are contributing to this record low:

Strong US Dollar:
- A surge in the US dollar is largely driven by increased demand due to month-end payment obligations and fears of aggressive import tariffs under the Donald Trump administration.
- Additionally, a hawkish US Federal Reserve and expectations of a stronger US economy continue to support the greenback.
Soaring Crude Oil Prices:
- Brent crude rose by 0.69% to $73.13 per barrel, which pushed the rupee lower. Rising oil prices have been a consistent pressure point on the rupee, especially in an import-dependent economy like India’s.
Weak Domestic Markets:
- Domestic equities have remained subdued, contributing to the overall weakening of the rupee.

Intraday Movement and Closing Performance

The rupee opened at 85.10 but briefly dipped to an intraday low of 85.21 before settling at 85.20—marking a loss of 9 paise from its previous close of 85.11 on Monday.

The Bigger Picture: What’s Next for the Rupee?

With the US dollar index rising by 0.11% to 107.93, amid soaring US Treasury yields, the rupee may continue to face pressure.
Experts predict the USD-INR spot price could trade in a range of Rs 85 to Rs 85.40 in the short term.

Key Factors to Watch:

FII Outflows: Continued foreign institutional investor (FII) outflows could weigh on the rupee.
RBI Intervention: Analysts suggest that the Reserve Bank of India (RBI) may step in to support the rupee at lower levels.

Key Highlights:

The rupee closed at 85.20, marking a fresh all-time low.
Increased dollar demand and rising crude oil prices are major contributors to the fall.
US Federal Reserve’s hawkish stance and stronger US economic outlook could further strengthen the dollar.
FII outflows and potential RBI intervention are key factors to monitor.

As the rupee continues to struggle against a strong US dollar, the question remains: Will RBI steps be enough to stabilize the currency? Or are we witnessing the beginning of a prolonged decline? Stay tuned as we closely watch these unfolding developments.

Stocks Highlights

Tata Motors Ltd.: A Strong Performer, But Can It Keep It Up?
Tata Motors Ltd. is on a roll today, with its stock price climbing 1.79%, reaching Rs 735.10, up from the previous close of Rs 722.20. But is this a short-term jump, or is Tata Motors on the path to sustained growth?

Key Highlights:

Tata Motors’ stock up by 1.79%, reaching Rs 735.10.
In the last 20 years, only 2.34% of trading sessions saw declines greater than 5%.
Return on Equity (ROE): A stunning 36.97% for the year ending Mar 31, 2024, outpacing its 5-year average of -1.07%.
Revenue Growth: Tata Motors’ annual revenue growth of 26.61% beats its 3-year CAGR of 20.47%.

Despite market volatility, Tata Motors’ performance is remarkable. The outperforming ROE and strong revenue growth indicate the company is positioning itself for success. But will the positive momentum continue?

Power Grid Corporation of India Ltd.: Decline or a Temporary Setback?
On the flip side, Power Grid Corporation of India Ltd. saw a decline of 1.68%, with its stock price dropping to Rs 310.00, down from Rs 315.30. This raises questions about the stability of the stock. Is this a blip, or is there a larger trend at play?

Key Highlights:

Power Grid’s stock down by 1.68%, last traded at Rs 310.00.
In the last 17 years, only 1.1% of trading sessions saw declines greater than 5%.
Employee & Interest Expenses: Power Grid spent 19.14% of its operating revenues on interest expenses and 5.31% on employee costs in the year ending Mar 31, 2024.

While Power Grid has been a strong performer in the past, today’s drop raises some questions. Is the high interest burden affecting the company’s bottom line, or is this simply a momentary dip in a long-term growth trajectory?

Advance Decline Ratio

Today, the advance-decline ratio was 1.01 and the market breadth was positive. The volatility index India Vix decreased by 2.53 to settle at 13.18 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1396
Decliners – 1380
52Wk High – 39
52Wk Low – 51
High Band Hitters – 80
Low Band Hitters – 62
200d SMA – 23847
50d SMA – 24276
20d SMA – 24316

Top Gainers and Losers Stocks

The top gainers were Tata Motors (+1.79%), Adani Enterprises (+1.41%), Eicher Motors (+1.04%), Nestle India (+0.86%), and BPCL (+0.85%).

The top losers were Power Grid (-1.68%), JSW Steel (-1.41%), SBI Life (-1.28%), Titan (-1.12%), and Infosys (-1.09%).

Top Gainers and Losers Sectors

The top gainers sector were Auto (+0.57%), FMCG (+0.54%), and Oil & Gas (+0.54%).

The top losers sectors were Metal (-0.83%), IT (-0.39%), Media (-0.34%), Consumer Durables (-0.3%), and Financial Services (-0.20%).

SECTORS – NOTABLE ACTION
AUTO +0.57%
FMCG +0.54%
OIL & GAS +0.54%
METAL -0.83%
IT -0.36%
MEDIA -0.34%

Stocks Ban List

(SEBI) F&O ban list (RBLBANK close at +163.31), (GRANULES close at +596.85), (HINDCOPPER close at +280.65), (MANAPPURAM close at +186.08), and (BANDHANBNK close at +166.54) 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.

CANFINHOME, EXIDEIND, LTF, IGL, PNB, ABFRL, AARTIIND, and INDUSINDBK stocks has the possibilities of entrants in the ban list.

HINDCOPPER, MANAPPURAM, and BANDHANBNK stocks has the possibilities of exit from the ban list.