NIFTY PREDICTION FOR 16 DEC 2024

Market Overview On December 13, Indian equity indices closed on a strong note with the Nifty surging above 24,750. The Sensex gained 843.16 points (1.04%) to close at 82,133.12, while the Nifty added 219.60 points (0.89%) to end at 24,768.30.

The trading session was characterized by significant volatility, with the Nifty experiencing sharp swings in both directions before closing near the day’s high. Despite a weak opening, markets recovered, supported by value buying in banking, IT, and telecom sectors amid improving macroeconomic indicators.

Technical Analysis

• Daily Chart: Nifty tested its 20-day moving average (24,200) and rebounded sharply. The index’s strong close near the day’s high indicates the potential for further upside.

• Weekly Chart: The Nifty formed an Inside Bar candlestick pattern, making the extremes of the previous candle (24,858 – 24,009) crucial levels to watch for the upcoming week.

• Key Levels:

  • Resistance: Immediate resistance is expected at 24,800, with potential upside targets at 25,125 and higher.

  • Support: Key support levels are positioned at 24,550 and 24,400.

Derivative Data

• Short Covering: Significant short covering was observed at the 24,600 CE.

• Put Writing: Strong put writing occurred at 24,500 and 24,400 strikes.

• PCR: The Nifty Weekly Put-Call Ratio (PCR) improved from 0.70 to 1.04, signaling bullish sentiment.

Sectoral Highlights

• Gainers:

  • FMCG, IT, Banking, Telecom: These sectors led the gains, rising 0.5% to 2%. The FMCG sector outperformed due to easing food inflation, festive demand, and price hikes by companies.

  • Top Gainers: Bharti Airtel, Kotak Mahindra Bank, ITC, UltraTech Cement, and HUL.

• Losers:

  • Realty, Metal, Media: These sectors declined by 0.5% each.

  • Top Losers: Shriram Finance, IndusInd Bank, Tata Steel, Hindalco, and JSW Steel.

• Broader Indices: Both the BSE Midcap and Smallcap indices ended on a flat note.

Market Drivers

1. Improving Macroeconomic Indicators:

   • Moderation in food inflation.

   • Uptick in Index of Industrial Production (IIP) growth numbers.

2. Value Buying: Investors showed interest in beaten-down sectors like banking, IT, and telecom.

3. Consumer Spending Outlook: Anticipation of higher spending during the festive season and year-end holidays boosted market sentiment.

Brookfield India REIT Capital Raise Brookfield India Real Estate Trust raised ₹3,500 crore through a Qualified Institutional Placement (QIP) to reduce debt. This marked the first REIT investment in India by the International Finance Corporation (World Bank Group) and Life Insurance Corporation of India. The issue attracted strong demand from institutions, mutual funds, and insurance companies.

Outlook for the Upcoming Week The Nifty’s strong finish near the day’s high and improving derivative data suggest positive momentum is likely to persist. A breakout above 24,800 could pave the way for a move toward 25,125 and beyond. On the downside, support at 24,400 and 24,550 will be crucial. Participants are advised to:

• Focus on IT and banking sectors.

• Employ robust risk management strategies to navigate market volatility effectively.

Conclusion Indian equities demonstrated resilience by rebounding from a weak start and closing on a positive note. With supportive macroeconomic data, sectoral strength in FMCG, IT, and banking, and bullish technical patterns, the markets appear poised for further gains in the short term.