Last week, it was primarily indicated that if Nifty could cross the pressure zone of 26,023–26,058, there was a possibility of a move towards 26,203, with this level subsequently becoming a resistance line. Simultaneously, the support was seen at the 25,899 level. Although the week started with a strong rally on the first day and even breached 26,203 in the subsequent days, it was unable to close above this level even once. Eventually, the market closed the week at 26,042. It can be said that the bulls squandered the dominance they had established at the beginning of the week. Let us look at what can be expected in the market in the coming days. We are entering a week that combines the last three trading days of this year and the first two trading days of the New Year.
Last week, the Dow Jones crossed the resistance line of 48,300 and closed at 48,711. The immediate targets ahead are 49,151–49,414. Sustaining the support at 48,300 is crucial. In the international market, Gold (Comex) closed at 4,552. The immediate targets are 4,652–4,675. It is also important to maintain the previous resistance level of 4,345 as a support until the end of this month.
Before looking at Nifty’s direction, it is appropriate to examine the status of the major sectoral indices within Nifty.
Nifty Auto Index: Closed at 27,740 last week. The Auto Index, which has maintained a bullish trend so far, shows support in the 27,581–27,013 zones. The trend will turn negative only below this. On the upside, the first pressure zone is seen at 27,833.
Bank Nifty: It is a cause for concern that Bank Nifty is not even making an attempt to cross the “Lakshmana Rekha” (crucial barrier) at 59,907. Currently situated at 59,907, the major supports seen below are 58,001–57,157–56,838. A possibility for an upward move is seen only if it can close above 59,907.
Nifty Commodities Index: Currently at 9,332. If it fails to cross the nearest resistance line at 9,356–9,429, the strength of the supports at 9,065–8,875 will be tested. If it manages to cross 9,429 and advance, it can surge towards the 9,608–9,749–9,896 levels.
Nifty Consumption Index: Currently at the 12,231 level. Its future trend will be determined by whether it crosses the nearest support at 12,151–12,013 or the pressure zone at 12,467–12,531.
Energy Sector Index: Currently at 35,058. Above 35,388, the resistance lines at the 35,677–36,065 levels will be tested. The Energy Index is currently existing on the strength of the support at the 34,742–34,350 levels.
Financial Services Sector Index: Currently in a state similar to Bank Nifty; crossing the crucial barrier of 27,531 is essential to continue the rally. The nearest support is 27,310–26,874. If this is lost, it may enter a significant correction.
FMCG Sector: Currently trading at 55,132. If it can break through the 55,248–55,696 levels and advance, a new bull trend can be expected in this index. The subsequent pressure zone to watch is within the 57,020–58,485 levels.
Infra Index: Trading at 9,564. The crucial barrier to be crossed ahead is 9,769. The nearest support is 9,039–8,981.
Nifty IT Index: Standing at 38,572. If the support at 38,136–37,672 can be maintained, the rally can continue. The key levels ahead are 40,605–42,623–43,134.
Metal Index: Trading at 10,806, just near the all-time high of 10,837. Above 10,837, the Metal Index will target the 11,137–11,530–12,650 levels. The supports to watch below are 10,149–9,968.
Pharma Index: Trading at 22,684. This index is haunted by the drawback of being unable to cross the crucial barrier of 23,725. The nearest pressure zone is at 23,162, and support is currently at the 22,601–22,394 levels. Breaching these could affect the trend.
Public Sector Index: Currently at the 9,759 level. If it can break the pressure at the 9,785–9,872 levels and advance, a bull wave can be expected. Although the resistance line at the 10,079–10,181 levels will subsequently become a hurdle, breaking the 9,872 resistance line would be the first step towards advancing to 10,249 and greater heights.
The Dollar Index has started showing support near 97.40. If this is sustained, it may reach the next major pressure zone of 100.40 in the coming days.
Now, let us examine the key levels for Nifty.
As mentioned earlier, Nifty, at 26,042, closed last week with some signs of fatigue. The support at the 26,009–25,972 levels should be watched in the coming days. Losing this will push Nifty to test the strength of the supports at 25,891–25,726–25,693. If this is also lost, it will lead Nifty towards the major supports at 25,550–25,318–25,175. On the upside, the first resistance line to watch in the coming days is at 26,122. If the pressure in the 26,224–26,319 zone above this is also crossed, the bulls can continue their rally.