Trade Setup For Dec. 31: Nifty Consolidating Between 23,500 Support And 23,860 Resistance
The domestic markets are anticipated to remain range bound in the near term.
The NSE Nifty 50 is currently consolidating between a support of 23,500 and resistance of 23,860. Analysts suggest that a breakout above 23,860 could pave the way for a move toward 24,000–24,100, while a drop below 23,500 may signal potential further downside.
Technically, the Nifty failed to sustain above its 200-day simple moving average, placed at 23,860, despite multiple attempts, forming a red candle on the daily chart, signaling weakness. On the downside, the recent swing support is placed near 23,540, according to Hrishikesh Yedve, research analyst at Asit C. Mehta Investment Interrmediates Ltd.
"Thus, 23,500–23,540 will act as a key support for the index. In the immediate term, Nifty is expected to consolidate between 23,500 and 23,900, with a breakout on either side defining its future trajectory," Yedve highlighted.
At this moment, the benchmark index is showing a range-bound movement, indicating that it is fluctuating within a specific price range. The level of 23,600–23,500 is particularly important, serving as a critical support zone where buying interest could potentially emerge, according to Osho Krishnan, senior technical and derivatives analyst at Angel One. "On the other hand, the 23,800–23,850 subzone poses a formidable challenge, as overcoming it on a closing basis will be essential for a sustained upward trend."
For the market to gain momentum based on clear trends, a decisive breakthrough at this level is crucial. Until such an event occurs, it is wise to proceed with caution and remain vigilant in trading activities, Krishnan said.
"For the calendar year 2025, we expect consolidation to continue in the first half, while the second half could see a recovery on the back of enhanced government spending and improved corporate earnings," Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services Ltd., said.
Khemka highlighted that domestic markets were anticipated to remain range bound in the near term.
Technically, the Bank Nifty has formed a red candle on the daily chart, indicating weakness, although it reversed from trendline support and defended its 200-DSMA, placed at 50,600, according to Yedve.
"On the upside, the 50-DEMA at 51,960 will act as resistance. In the short term, Bank Nifty is expected to trade within the 50,500–52,000 range, with a breakout in either direction determining its future direction," he said.
FII/DII Activity
Overseas investors have been net sellers for ten consecutive sessions and domestic institutional investors stayed net buyers for the ninth straight session.
The foreign portfolio investors offloaded stocks worth approximately Rs 1,893.16 crore and DIIs bought stocks worth Rs 2,173.86 crore, according to provisional data from the National Stock Exchange.
F&O Action
The Nifty January futures were down by 0.69% to 23,828 at a premium of 184 points, with the open interest up by 5.8%.
The open interest distribution for the Nifty 50 Jan. 2 expiry series indicated most activity at 25,000 call strikes, with the 21,600 put strikes having maximum open interest.
Market Recap
The benchmark equity indices eroded early gains in the last leg of the trade to end lower on Monday as HDFC Bank Ltd. and ICICI Bank Ltd. led the losses. Broad-based weakness across Asia and Europe also put pressure on the indices.
The NSE Nifty 50 closed 168.50 points or 0.71% down at 23,644.90 and the BSE Sensex ended 450.94 points or 0.57% lower at 78,248.13.
Major Stocks In News
RVNL: The company emerged as lowest bidder for central railway project worth Rs 137.16 crore.
Mazagon Dock: The company signed contract worth of Rs 1,990 crore with Ministry of Defence for air independent propulsion plug.
Prestige Estates Projects: The company’s unit subscribed to 96,079 equity shares of WSI Falcon Infra Projects to hold 49% equity stake. WSI Falcon Infra Projects is developing IT/IT enabled services/parks in 6.53 acres of land situated at Porur, Chennai.
Wipro: The company to acquired 100% stake in Applied Value Tech by Jan 31, 2025.
Jubilant Ingrevia: The arm Jubilant Infra to acquire 6.67% stake in Forum I Aviation. The arm to hold 15.79% stake in FAPL post-acquisition.
Money Market
The Indian rupee ended the day flat at 85.54 against the US dollar on Monday. The domestic currency had opened at 85.48, showing a gain of 6 paise from its previous close of 85.54.
Global Cues
Stocks in the Asia-Pacific region plunged in the last trading session of the year as a three-day rout on Wall Street weighed on investors' sentiments.
Many Asian markets will remain closed, or open for half a day on Tuesday, while those in Japan are closed from Tuesday through Jan. 6. Indian stock market will remain open on Jan. 1, while global markets will be shut on account of the New Year's Day.
Australia's S&P ASX 200 was down 62 points or 0.77% at 8,171, as of 6:29 a.m. Futures contracts pointed to gains in mainland China and losses in Hong Kong.
Chinese stocks will be in focus with PMI data releases scheduled on Tuesday. China reporting manufacturing and non-manufacturing PMI, while US housing market indices will provide insights into property trends. Investors will look at the data points for cues on recovery path of the nation's economy.
Sentiments in the Asia region soured after stocks in the US fell for the third consecutive day. Analysts expect global markets to continue seeing heightened volatility in the first half of the calendar year 2025.
The S&P 500 and the tech-heavy Nasdaq Composite fell 1.07% and 1.19%, respectively, on Monday. The Dow Jones Industrial Average slumped 0.97%. The US 10-year yield declined nine basis points to 4.53% during the session.
In 2024, the so-called Magnificent Seven cohort of US tech giants has driven an advance of more than 20% in the S&P 500, according to Bloomberg.
The dollar index — which tracks the greenback's performance against a basket of 10 leading global currencies — slipped 0.07% to 108.05. However, the dollar is headed for its best year since 2015.
The New York Stock Exchange, Nasdaq Inc.’s US equities exchanges and Cboe Global Markets Inc. will be shut on Jan. 9, in observance of a national day of mourning for Jimmy Carter, the 39th president of the US.
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