Trade Setup For Dec. 19: Nifty Faces Weak Sentiment, Key Support At 24,200
The NSE Nifty 50 and Bank Nifty indices face downward pressure, with concerns that Nifty 50 could fall further below 24,200, while Bank Nifty tests key support levels.
The sentiment of NSE Nifty 50 appears weak and could worsen if it sustains below the 24,200 level, according to Rupak De, senior technical analyst at LKP Securities.
"A decisive fall below 24,200 may trigger a correction towards 23,850 in the short term. On the upside, 24,400 is likely to act as resistance," he said.
Bank Nifty has broken the support of 52,500 along with the previous week's low of 52,265, according to Hrishikesh Yedve, assistant technical and derivatives research at Asit C. Mehta Investment Interrmediates Ltd. "Thus, in the short term, 52,500 will serve as a strong barrier for the index," he said.
"On the downside, the index will find strong support around 51,680, where the 100-day exponential moving average (100-DEMA) is placed. If the index remains below 52,500, bounce should be used for booking profits," Yedve said.
The Nifty has made another bearish candle, said Aditya Gaggar, director of Progressive Share Brokers Pvt. "On the hourly chart, the index (Nifty 50) has entered an oversold condition, and a bounce is warranted."
Gaggar provides immediate resistance and support for the index at 24,370 and 24,100 respectively.
The GIFT Nifty was 1.39%, or 337.5 points down at 23,917.
Market Recap
The benchmark equity indices declined nearly 2% in the last three days as market participants look forward to the policy decisions from the US Federal Open Market Committee. Private bank stocks weighed on the Indian benchmarks the most in the last three sessions.
The NSE Nifty 50 ended 137.15 points or 0.56% lower at 24,198.85 and the BSE Sensex closed 502.25 points or 0.62% down at 80,182.20.
FII/DII Activity
Overseas investors stayed net sellers of Indian equities for the third straight day on Wednesday.
Foreign portfolio investors net sold stocks worth Rs 1,316.8 crore, whereas domestic institutional investors were net buyers of equities worth Rs 4,084.1 crore, according to provisional data shared by the National Stock Exchange.
F&O Cues
The Nifty December futures decreased 0.61%, settling at 24,268, with a premium of 70 points. The open interest for the Nifty December futures dropped 1.06%.
As for the Nifty options expiring on Dec. 19, the maximum call open interest is at 25,500, while the maximum put open interest stands at 24,000.
Major Stocks In News
Borosil Renewables: The company decided to cancel its proposed rights issue of Rs 450 crore and, instead, approved a plan to raise Rs 600 crore through a preferential issue of equity shares and Rs 100 crore through warrants.
Brigade Enterprises: The company announced the launch of Brigade Citrine, India’s first net-zero residential development with an estimated gross development value of Rs 500 crore.
JSW Infrastructure: The company's arm, JSW Tuticorin Multipurpose Terminal, will avail a loan of Rs 500 crore from ICICI Bank and Canara Bank for the project to develop the Tuticorin port.
Global Cues
Asian stocks fell on Thursday, following a sharp decline in US equities, after the Federal Reserve reduced its expectations for rate cuts in 2025.
Equity benchmarks in Japan, Australia, South Korea, and China all dropped.
US stock futures edged higher after the S&P 500 posted its largest loss on a Fed decision day since 2001. As of 7:32 a.m., the Nikkei 225 was down by 421.05 points, or 1.08% at 38,660.66, while the S&P ASX 200 fell by 157.77 points, or 1.90% to 8,151.60.
The Federal Reserve cut interest rates by 25 basis points, as anticipated, but scaled back the number of rate cuts expected in 2025 to two, signalling more caution about reducing borrowing costs too quickly. US stocks reacted negatively to the news, with the S&P 500 and Nasdaq Composite dropping 2.95% and 2.58%, respectively, on Wednesday. The Dow Jones Industrial Average also declined by 2.58%.
In commodities, Brent crude was down 0.44% at $73.07 per barrel, while gold rose 0.98%, reaching $2,610.62 per ounce.
Key Levels
US Dollar Index at 108.05.
US 10-year bond yield at 4.51%.
Brent crude is down 0.44% at $73.07 per barrel.
Bitcoin was down 0.53% at $100,410.88.
Gold spot was up 0.98% at $2,610.62 an ounce.
Rupee Update
The Indian rupee weakened by 5 paise to end at a fresh record closing low of 84.95 against the US dollar ahead of the final policy decision by the Federal Reserve. The local currency weakened to 84.96 during the day. It closed at 84.90 on Tuesday.
