• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Week Ahead: NIFTY Faces An Imminent Consolidation; This Index May Finally Start To Relatively Outperform
Stock

Week Ahead: NIFTY Faces An Imminent Consolidation; This Index May Finally Start To Relatively Outperform

by December 9, 2023
by December 9, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

The markets continued their unabated upmove; following a strongly trending week, the Nifty not only ended at a fresh lifetime high point but also closed with gains for the sixth consecutive week. The markets piled up decent returns despite some signs of consolidation in the second half of the week. The last two days were choppy for the markets. However, on a weekly note, volatility, as represented by INDIA VIX remained unchanged. India Vix ended just 0.71% higher to 12.47 on a weekly basis. The trading range stayed expanded; the index oscillated in the 498.35 point range through the past five sessions. The benchmark index Nifty50 closed with a strong gain of 701.50 points (+3.46%) on a weekly basis.

From a technical standpoint, the previous week has created a gap. In the process, the index has shifted its support zones higher in the range of 20450-20550 levels from 20000. The Nifty has also closed above its upper Bollinger band. Even if there is a temporary pullback inside the band, the markets may further their uptrend even with the possibilities of some consolidation at current levels. The behavior of the NIFTY vis-à-vis the level of 21000 is crucial. If the index is able to take this level out and stay above it, the markets will open up some more room for themselves on the upside. However, until this happens, the markets also stare at entering into a period of consolidation and take a breather after very strong moves over the past few weeks.

Monday is likely to see a quiet start; the levels of 21090 and 21265 are likely to act as potential resistance points. The supports come in at 20700 and 20580 levels. The trading range is likely to stay wider than usual.

The weekly RSI stands at 72.44; it has marked a new 14-period high which is bullish. It stays neutral and does not show any divergence against the price. The weekly MACD has shown a positive crossover; it is now bullish and trades above the signal line.

The pattern analysis of the weekly chart shows that Nifty has not only scaled a fresh lifetime high level, but it has also broken out from the rising channel with a gap. In the process, the Index has managed to drag its supports higher from 20000 levels to the 20450-20550 zone. So long as the index keeps its head above this zone, the breakout and trend will remain intact.

The closing of the Index above the upper Bollinger band has fortified the chances of it moving higher; however, given the kind of runup the Nifty has seen, it has gone a bit ahead of the curve. In this case, with 21000 not taken out, we may see the markets slipping into some ranged consolidation.

All in all, this is the time when one needs to get defensive and cautious. Protecting gains at current levels is of paramount importance. While fresh purchases can be made highly selectively, emphasis should also be placed on protecting profits at current and higher levels. The defensive pockets like FMCG, IT, PSE, etc., may continue to find traction over the coming days. While getting extremely selective with new purchases, profits must be guarded at higher levels.

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed.

Relative Rotation Graphs (RRG) show that the Nifty Realty, PSE, Infrastructure, Energy, and Commodities indices are inside the leading quadrant. These groups are likely to relatively outperform the broader Nifty 500 index over the coming week.

The Nifty Auto Index which was in the weakening quadrant is seen paring its momentum. Also, the Midcap100, PSU Bank, Media, Pharma, and the Metal index continue to drift inside the weakening quadrant. Isolated stock-specific shows may be seen from these groups but overall they may get slower in terms of relative performance.

The NIFTY IT Index has rolled inside the lagging quadrant. It may now relatively underperform the broader markets.

The Nifty Bank index has finally rolled inside the improving quadrant. This may lead to the end of this sector’s relative underperformance. Besides this, the Consumption, FMCG, Financial Services, and Services sector indices are also inside the improving quadrant.

Important Note: RRG™ charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

You Might Also Like
  • NVDA Is Not The Only Semiconductor Stock Out There.
  • Complimentary Edition of the DecisionPoint “Weekly Wrap”
  • DP Trading Room: Use a Price Momentum Oscillator (PMO) Sort to Find Winners!
  • Week Ahead: NIFTY May Have Limited Upsides In The Truncated Monthly Expiry Week; Watch These Key Levels
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Will Trump’s unprecedented general election campaign style work during primary season?
next post
Is Overbought Really Bearish?

You may also like

Find Trades Using These POWERFUL MACD Combinations

July 17, 2024

What’s Really Driving Tesla’s Surprising Stock Surge?

April 24, 2024

Market Update: CPI-Fueled Rally Fizzles Out as Stocks Sag

August 10, 2023

How to Stop the “Wealth Destroyers” by Deploying Your Sell...

June 14, 2024

The Halftime Show: S&P 500 Testing Its Resolve

February 13, 2023

The Easiest Road to Supercharge Your Investing Reflexes and Reactions!

May 2, 2025

Pay Attention to THIS! The Market is About to Skyrocket

August 2, 2023

Celebrating AAPI Heritage Month: Jonathan Lin’s Road From IT to...

May 23, 2023

With The Top 10 Picks In The Stock Market DRAFT,...

February 19, 2024

S&P 500 Breakdown Alert! Downside Targets Explained

January 10, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Growth Stocks Tumbling; Where to Find...

    March 1, 2025

    SCTR Report: Vistra Energy Soars, Reaches...

    October 2, 2024

    Week Ahead: NIFTY Forms A Potential...

    September 23, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here