Rarely do you see the index gaining for most part of the week and yet reporting a weekly loss. That happened to the Nifty last week. The index ended higher in three out of the five trading sessions last week, but Wednesday’s sharp sell-off ensured that it ended lower for the week, albeit only marginally.
As the market heads into the final week of 2023, the Nifty is up 17.5% for the year. From the lows of 16,828, which it made in March this year, the index has added nearly 4,500 points over the next nine months.
The upcoming truncated week will also see lack of participation as most global institutions proceed on their new year holiday. However, the IPO mania continues with more listings lined up for the upcoming week.
However, foreign investors continued to remain net sellers during Friday’s trading session, while domestic institutions were net buyers in the cash market.
The 20-Day Exponential Moving Average (DEMA) for the Nifty 50 placed at 20,850 – 20,900 will continue to act as an important support, which if broken, can bring some price correction on the index. “Certain sectors like IT and selective Pharma stocks can buck the trend and provide good trading opportunities in the short-term,” he said.
Subhash Gangadharan of HDFC Securities said that the short-term trend of the Nifty remains downward even as it reversed most of Wednesday’s losses. The index will have to cross the recent high of 21,593 to reverse the current downtrend with crucial downside support at 21,232, he said.
However, Amol Athawale of Kotak Securities believes that the pullback in the Nifty will continue till it remains above 21,200, below which, the index can fall towards 21,100. He expects the index to move back towards levels of 21,500 – 21,550 till the downside supports are respected.
While the Nifty 50 continued its reversal, the same couldn’t be said of the Nifty Bank as the index underperformed the benchmark after a few weeks of outperformance. For the week, the index ended 1.3% lower and is now up 10% for the year so far.
The Nifty Bank has now made seven attempts to cross the 48,000 mark but has managed to close above it only once, indicating strong resistance.
Although the Nifty Bank witnessed selling pressure, it managed to hold the key support level of 47,400. If it fails to sustain those levels, it can fall further towards 47,100, said Kunal Shah of LKP Securities. On the upside, immediate resistance is now at 47,700, above which the index can move towards 48,000 – 48,200.
Kotak Securities’ Athawale said that 47,000 remains a crucial support for the Nifty Bank, above which it could move towards 48,000 – 48,300. However, a slip below 47,000 can drag the index down towards 46,700 – 46,500 levels.
What Are The F&O Cues Indicating?
Nifty 50’s December futures added 0.5% and 33% across the series. They are now trading at a premium of 52.95 points from 95.35 points earlier. on the other hand, Nifty Bank’s December futures shed 6.3% in Open Interest and 40% across the series. Nifty 50’s Put-Call Ratio is now at 1.18 from 1.11 earlier.
NALCO has entered the F&O ban list from Tuesday’s session, while Manappuram Finance and RBL Bank are out of the ban.
Ashok Leyland, India Cements, SAIL, Balrampur Chini, Delta Corp and Hindustan Copper continue to remain in the F&O ban.
Nifty 50 on the Call side for December 28 expiry:
On the call side, the Nifty 50 strikes between 21,800 and 22,500 have seen addition in Open Interest for this Thursday’s weekly and monthly expiry, which also happens to be the last for 2023.
Strike | OI Change | Premium |
22,500 | 20.45 Lakh Added | 1.75 |
22,000 | 17.86 Lakh Added | 4.85 |
21,800 | 16.39 Lakh Added | 12.65 |
22,300 | 14.96 Lakh Added | 2.15 |
Nifty 50 on the Put side for December 28 expiry:
On the Put side, the Nifty 50 strikes between 20,800 and 21,400 have seen Open Interest addition for this Thursday’s expiry:
Strike | OI Change | Premium |
21,300 | 24.27 Lakh Added | 81.15 |
21,200 | 21.53 Lakh Added | 55.55 |
21,400 | 21.11 Lakh Added | 117 |
20,800 | 19.96 Lakh Added | 16 |
These stocks saw short covering on Friday, meaning an increase in price but decline in Open Interest:
Stock | Price Change | OI Change |
Mphasis | 2.38% | -28.50% |
Persistent Systems | 3.99% | -27.57% |
Sun TV | 4.16% | -27.23% |
Britannia | 2.30% | -27.19% |
Piramal Enterprises | 3.14% | -26.99% |
These stocks witnessed unwinding of long positions on Friday, meaning a decrease in both price and Open Interest:
Stock | Price Change | OI Change |
AU Small Finance Bank | -1.71% | -45.74% |
Polycab | -4.61% | -41.79% |
IDFC First Bank | -0.28% | -35.79% |
HDFC Life | -0.60% | -33.84% |
MCX | -2.18% | -31.40% |
Here are the stocks to watch out for ahead of Tuesday’s trading session:
What Are Global Cues Indicating?
US equities ended mostly higher on Friday with the S&P 500 posting its eighth straight weekly advance. This is the longest winning run for the equity benchmark since 2017.
The S&P 500 is now 0.9% away from its record close and 1.3% away from its intraday record. The eighth week advance for the Dow Jones was the best since 2019.
November’s Core Personal Consumption Index rose just 0.1% last month and 3.2% from last year, in-line with expectations.
The US markets will remain shut on account of Christmas on Monday.
First Published: Dec 25, 2023 2:26 PM IST
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.