Weekly Market Outlook for 12 dec to 16 dec

The indices consolidated within a narrow range for most part of the week but it witnessed some selling pressure towards the end. Nifty ended the week around 18500 with a weekly loss of about a percent but the Bank Nifty index showed relative outperformance and ended at its all-time high and posted weekly gains of over a percent.

Nifty Today:

In last one week, Nifty has seen some correction from the highs posted on 1st December. If we look at the data, this correction mainly seems because of profit booking where we have seen unwinding of long positions by the FII’s in the index futures segment. Their Long Short Ratio has reduced from about 76 percent to 60 percent in this period. However, we have not seen any short formation and the Nifty index too has not closed below its crucial 20-day EMA support. The RSI oscillator on the Nifty charts has given a negative crossover indicating a corrective phase but the readings on the Bank nifty index still remains positive although in an overbought zone. It was the IT space which dragged the Nifty lower as the Nifty IT index corrected by more than 3 percent on Friday. Thus, in the near term it would be crucial to see whether the Banking index continues its uptrend and uplifts the benchmark too from its 20 DEMA support. The immediate support for Nifty for the coming week is placed in the range of 18550-18380 and if this support range is breached, then we could see a price wise corrective phase in the short term towards 18100. On the flipside, if the Nifty manages to hold this support then a pullback move towards 18650 and 18730 could be seen. 

IT stocks drags Nifty lower towards the end of the week

Amongst sectoral indices, Nifty IT index has breached its crucial support while the Banking and the FMCG index is still showing strength and indicating a continuation of the uptrend. Most of the other indices are showing signs of consolidation. In the coming week, U.S. Federal Reserve will be announcing their policy outcome and how the global markets react to the same will be the crucial event to watch out for. 

Nifty & Bank Nifty Levels: