Weekly Market Outlook for 5 dec to 9 dec

Nifty continued to clock new record highs in the week gone by and it almost tested the 18900 mark. It was just a distance away from the milestone of 19000, but it corrected on the last trading session of the week and ended below 18700 with weekly gains of a percent.

Nifty Today:

The Nifty continues its ‘Higher Top Higher Bottom’ structure and thus is in a short term uptrend. But the momentum readings on the hourly chart of Nifty and on the daily chart of the Bank Nifty index reached the overbought zone post the recent run up from 16800 to 18800. To relieve the overbought set ups, markets either witness a price-wise correction or a time-wise corrective phase which then forms the base for the next leg of trended move. Now if we look at the broader markets, the Midcap space showed a relative underperformance to the benchmark in last couple of months, but off late (in last one week) the stocks have witnessed buying interest and are showing a catch up move. Als the external data such as the global markets, Dollar Index and FII’s positions in the index futures segment remains positive for the equity markets. Hence, the stock specific positive momentum could continue going ahead and the index might go through some timewise correction only in the near term. The Nifty index is trading in a rising channel and the support end of the same is placed around 18500. On the flipside, 19000 will be the immediate resistance to watch out and if that is surpassed, then the higher end of the channel will be seen around 19200. 

Focus shifts to stock specific action as midcaps witness catch up move

So after more than 2000 points run up in the index, we believe it is a good time to shift focus on stock specific opportunities as such strategy could provide better returns in the near term.

Nifty & Bank Nifty Levels: