NIFTY PREDICTION FOR NEXT WEEK 20 DEC TO 24 DEC 2021

WEEKLY RESISTANCE FOR NIFTY: 17100, 17300, 17500

PIVOT POINT: 16900

WEEKLY SUPPORT FOR NIFTY:  16700, 16500, 16300

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 17050, 17100, 17150

PIVOT POINT: 17000

DAILY SUPPORT FOR NIFTY:  16950, 16900, 16850

DAILY CHART FOR NIFTYWe kick-started the week on a positive note as indicated by the SGX Nifty tad above 17600. During the first half, we witnessed some consolidation with some hint of profit booking. However, the selling aggravated as we stepped into the second half and as a result of this, market came off sharply to eventually close below the 17400 mark by shedding nearly eight tenths of a percent from the previous close. It was certainly a bright start to the week but as we entered into the corridor of uncertainty, market started to feel some heat. Due to reinforced selling, we not only erased morning gains but went on to close well inside the negative terrain. Monday’s sell off was followed by a weak opening on Tuesday morning on the back of nervous global cues. Thereafter, we witnessed some volatile swings in the first half but fortunately it was in a small band of 120 – 140 points as benchmark index kept oscillating on both ends of the range. Eventually, the bulls managed to defend the 17300 mark convincingly by restricting losses to merely one fourth of a percent. One day prior to the weekly expiry, we had a muted start on Wednesday. The bears dominated in the initial couple of hours of trade as we sneaked slightly below 17200. This was followed by a decent recovery to recoup major portion of the losses but final hour selling poured complete water on all the efforts to finally conclude the action packed day with a cut of more than half a percent. US markets had a remarkable rally overnight to close at day’s high post the Fed meeting. This brought some excitement across the globe Thursday morning and in line with this, our markets started the session with a good bump up well above 17300. However once again it failed to hold its early lead as we witnessed market not only erasing gains but also sliding in the negative terrain as the day progressed. Eventually Nifty concluded the weekly expiry marginally in the green; courtesy to some tail end recovery. After a day of hiatus, Maket were back on the losing track on Friday as surging Omicron cases in India and across the world spooked investors. Hawkish central banks in Europe also did not help the market. The Sensex declined 889 points to close at 57011 & Nifty fell 263 points.

NIFTY: A STRONG SUPPORT WILL BE @ 16800; STRONG RESISTANCE LEVEL SEEN @ 17800

On the index front, Nifty is likely to retest the previous swing lows and the 16,800-16600 zone would be critical. Participants should align their positions accordingly and prefer hedged bets.

TECHNICALLY SPEAKING

Emergence of a new COVID-19 variant- Omicron, inflation concerns and hawkish turn of global central bankers has led to an increase in volatility in equity markets worldwide including India. With inflation increasing in countries across the world, all eyes are on central bankers and the pace of liquidity normalization adopted by them. India has started seeing new cases of Omicron but the real impact would be known over the next month or so as was seen in previous waves of COVID-19. The pace of vaccinations in India continued to improve steadily. We expect that even while the structural drivers of the Indian equity markets are intact over the medium to long term, in the near term given the current valuations (both absolute and relative), Indian equity markets could witness some degree of volatility.  Market direction would be largely determined by 1) any third wave of COVID from new variant 2) flows from domestic investor as well as FIIs 3) demand trend over next few months and 4) movement in input cost inflation. RBI’s monetary policy and Union budget (to be presented in February) would be some of the other key events to watch out for.  On the way down, the index has broken the 61.8% retracement of the recent leg of the rise as well as lower end of the rising channel on the hourly chart. This shows that the short term range has shifted lower. 16700-17300 is expected to be the short term range going ahead. Overall structure shows that the fall in this week is a part of the base formation process & the index is likely to attract buying support near the recent low of 16750.