Last week – review
Indices ended this week with correction of around 1% but huge volatility was seen on Wednesday. Market started this week on positive note before seeing sharp reversal on Wednesday & recovery on Thursday and Friday. Market rally halted after two back-to-back weeks of positive news flow and rallied over 5% on all major indices.
Technical Insight
• Nifty after sharp fall on Wednesday is now trading in neutral zone with bullish trend. Nifty likely to remain in 20809 to 21492 range.
• Banknifty range for this week likely to be in 46800 & 48200. Banknifty Thursday’s low of 46919 to act as important level and fresh downtrend once this level is broken.
Approach on Technical: In last week’s technical approach, we mentioned that we will take rally of previous two weeks into consideration. Historically market in last week of calendar year tends to remain higher specifically when it is trading near its life-time high.
Nifty @ 21070 & 20809 to act as important support level and 21492 as resistance level. Banknifty @ 47042 & 46314 (23.6% & 38.2% retracement level) to act as support level and 48219 as resistance level. Market likely to hold on last Thursday’s low and test recent high this week.
Fundamental Insight
1) India’s Agri Exports Likely to Reach $53 Billion This Fiscal: Government
2) RBI To Boost Liquidity with Rs 1.75 Lakh Crore VRR Auction
3) Fitch Says Better Profitability at Indian Corporates to Support Rating Headroom
Equichain Wealth Advisors: Market View & Strategy
We expect market to hold on to current level with year-end rally likely to test recent high made on Wednesday. Market correction on Wednesday was over-due and COVID scare triggered further sell-off. We do not expect COVID-19 could trigger fresh weakness as we have seen in March 2020.
Our strategy this week would to focus on year end rally and keep stock specific approach and keep investment level around 80% or increase to 90% with short term view. We expect rally next week and it may continue in first week of January as well ahead of earnings season. Once earnings season starts – corporate earnings will provide fresh cues. Defense, IT & Banks would be interesting play for next 1 – 2 weeks on long side.