Nifty

Rupak De, a Senior Technical Analyst at LKP Securities, highlighted the Nifty's breakout from consolidation, driven by a rise in long positions compared to short trades. The index's comfortable position above crucial moving averages indicates robust sentiment, with potential for further advances toward 21,400 and beyond, according to De. Support is evident at 21,000, where significant Put positions are held.

Kunal Shah, a Senior Technical & Derivative Analyst at LKP Securities, noted resistance at higher levels for the Bank Nifty index and advised caution due to anticipated heightened volatility with the approaching weekly expiry. Traders were encouraged to implement strict stop-loss measures on both sides of the market.

Historically, small and midcap stocks enter a period of outperformance once they reverse from deep phases of underperformance, and perform poorly when they have high trailing outperformance.

As anticipated, the RBI Governor's decision to maintain key lending rates at 6.50 percent was already factored into market expectations.

Vijayakumar notes that any market dips are likely to be seized by Foreign Institutional Investors (FIIs) who have consistently demonstrated themselves as committed buyers. He points to the ongoing decrease in US bond yields, with the 10-year yield currently falling below 4.20 per cent, as a factor that will contribute to sustained FII buying.

In November 2023 specifically, midcaps and smallcaps continued their outperformance, exceeding largecaps by 4.9 per cent and 6.5 per cent, respectively.

The Indian equities market experienced a surge, reaching a fresh high of 20,702 following the BJP's decisive victory in three states.

The recent week in the stock market was marked by strong gains, with markets performing positively on three out of four trading sessions. Notably, Wednesday saw sharp gains, followed by a robust opening for the December series on Friday. The anticipation of election results in five states, as indicated by exit polls, suggested a closely contested race, with potential overall gains for the ruling party at the center. This, coupled with a strong rally in the Dow, contributed to the positive market sentiment.

"While index starting valuation may not be a sufficient pre-condition for a price-correction, we do not expect any decent upside to the Nifty index over the next six months and do anticipate a time-correction," the report said.

Nifty closed at 20,267.90, marking a gain of 134.75 points or 0.67 percent, while the Sensex reached 67,481.19, climbing 492.75 points or 0.74 percent. The Sensex is now just 446 points away from its all-time high of 67,927.23.