Trade Setup for December 2: The stock market witnessed a sharp decline on November 28 due to geo-political events. However, Nifty showed a strong recovery on November 29. On this day the market closed at the level of 24131.10 with a gain of 217 points. During this period, 26 out of 30 Sensex stocks saw a rise. At the same time, 43 out of 50 Nifty stocks closed with gains. Buying was seen in the pharma sector, with Cipla, Sun Pharma and Divi’s Laboratories being the top gainers in Nifty 50.
GDP figures for the second quarter have arrived, which were much lower than expected. The market will react to these figures on Monday. India’s growth rate declined to 5.4 percent in the September quarter, whereas GDP growth in the same quarter last year was 8.1 percent.
Adani Green Energy’s entry in F&O segment
Shares of Adani Green Energy started trading in the F&O segment on November 29. Adani Green shares jumped more than 23% on its first trading day as an F&O stock, its best single-day gain in more than a year. On Thursday and Wednesday the stock closed in the upper circuit of 10 percent. At the same time, the stock had fallen by 8% on Monday and Tuesday.
Further market direction is expected to be determined by geo-political developments and FII activity. Siddharth Khemka of Motilal Oswal expects the market to remain range-bound amid mixed global cues and lack of domestic triggers. On Friday, FIIs were net sellers in the cash market, while Domestic Institutions made purchases.
What do Nifty50 charts indicate?
Nagaraj Shetty of HDFC Securities said that the upside gap of November 25 has been completely filled and the market has found support around the gap area of 23900 and bounced back. Further upside from here could confirm a new higher bottom formation for Nifty, indicating completion of the down trend of the last few months.
Shetty believes that the bullish trend on Friday is indicating the return of bulls after a one-day decline. Further upside is expected from here and Nifty will challenge the immediate hurdle of 24,350 and move higher by next week. Immediate support is at the level of 23925.
Bulls have found some relief in the last two weeks, with a steady recovery from the recent low of 23263. However, this week saw consolidation in prices as prices remained range-bound after Monday’s gap-up.
Rajesh Bhosale of Angel One said that a defined range has emerged on the daily chart, with support base moving upwards in the 24000-23900 zone. On the other hand, 50 DEMA and 89 DEMA are acting as a strong resistance around 24350-24400 zone. Bhosale said a clear breakout from the 23900-24400 consolidation is likely to decide the market direction going forward. He said that until the upper boundary is not broken, bulls should remain cautious and avoid adopting an aggressive stance. A break below the low could signal a resumption of the downtrend, potentially leading to a retracement to recent lows.
Jatin Trivedi of LKP Securities said Nifty remained volatile in the afternoon and traded mostly in the range of 24050-24150. There has been a slight improvement in sentiment as the index remained above 23870. Further, the trend may remain positive to sideways in the short term, provided it remains above 23870. On the higher side, resistance lies at 24400-24500.
What do Bank Nifty charts indicate?
Nifty Bank started with a volatile session but later remained range bound. It closed at 52055.60 with a gain of 0.29 percent. Om Mehra of Samco Securities said, “Nifty Bank formed a spinning top candlestick pattern, indicating in-decision. Nifty Bank has now taken support from both 20 and 50 DMA after a breakout above 52,600. On the contrary, it may move towards 52,800, a fall below the critical support level of 51750 is marginally bearish. “This may indicate an outlook that requires caution in the near future.”
Hrishikesh Yedve, AVP Technical and Derivatives Research, Asit C Mehta Investment Intermediates, said, “On the daily chart, Bank Nifty has formed an insider bar candle, while on the weekly scale the index has formed a doji candle indicating uncertainty. The index stood at 52,500. Facing strong resistance near -52,600 level. 21-day downside. The exponential moving average (DEMA) is situated near 51540, which will act as immediate support for Bank Nifty. Traders are advised to book profits on the upside and wait for a breakout above 52600.
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