New Delhi [India], December 22 : As Friday's trading session gets underway, the Indian stock market anticipates a positive start, aligning with favourable global cues.
Early signals from Gift Nifty further bolster this outlook, with indications pointing to a higher opening for the Nifty 50 benchmark, set at around 21,382, compared to the previous close of Nifty futures at 21,376.
The previous day, on December 21, the domestic equity market staged a robust recovery, witnessing substantial gains across diverse sectors.
The Sensex concluded the session with a notable upswing of 358.79 points, reaching 70,865.10, while the Nifty 50 recorded a gain of 104.90 points or 0.50 per cent, settling at 21,255.05.
Analysing the daily chart for Nifty 50, market observers noted the formation of a bullish piercing candlestick pattern, suggesting potential bullish momentum in the market.
Despite attempts by Nifty bears to reverse the trend, the market showcased strong resilience, marked by a significant reversal from the low of 20,976, indicating a highly bullish sentiment.
The emergence of substantial buying activity, coupled with the bullish piercing line candle formation, sets the stage for a continuation of positive momentum in the upcoming session.
The ultra-short-term support for the market is now pegged at the previous day's low of 20,976.
Optimism prevails in the market, fuelled by the anticipation of an interest rate cut in the coming year. U.S. markets closing at all-time highs further contribute to positive sentiments.
Broader open interest (OI) data suggests a range of 20,900-21,800 on Nifty, reinforcing the bullish stance on sectors like IT, Pharma, Petrochemicals, and FMCG.
For those considering leverage bets, a prudent strategy involves maintaining trailing stop losses. The support levels for Nifty are identified at 20,976, 20,677, and 20,291, while short-term resistance is expected to persist around 21,593.
Investors are advised to view dips as opportunities to accumulate quality stocks, as the long-term bullish outlook for India remains intact.
With substantial inflows into the market and ample liquidity to absorb selling pressure, risk-defined strategies are deemed optimal for traders.
Investors are encouraged to accumulate quality stocks gradually, adhering to a staggered approach.
On the global front, the U.S. dollar maintains a subdued stance, hovering near a more than four-month low.
Varun Aggarwal, founder and managing director, Profit Idea said, "The U.S. dollar remained subdued, hovering near a more than four-month low on Friday, with investors awaiting the release of a crucial U.S. inflation gauge later in the day. This data is expected to offer insights into the extent to which the Federal Reserve can adjust interest rates in the coming year".
Investors are eagerly awaiting the release of crucial U.S. inflation data, which is expected to provide insights into potential adjustments in Federal Reserve interest rates in the coming year.
Simultaneously, gold prices have experienced an ascent, reaching their highest level in nearly three weeks.
This surge is attributed to growing expectations of Federal Reserve interest rate cuts early in the upcoming year, leading to a decline in the dollar and bond yields. Investors are closely monitoring the anticipated U.S. inflation data for further market cues.
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