Week Ahead

In the week ended December 1, the Nifty50 rallied 473 points or 2.4 percent to 20,268, and the BSE Sensex jumped 1,511 points or 2.3 percent to 67,481. The rally in the market was based largely on the perception that the US Federal Reserve was done with the rate hike cycle and a reversal was on the cards.

A better-than-expected quarterly GDP growth with consistent expansion in manufacturing activity, lower oil prices and return of foreign investors as net buyers helped sustain and accelerate the bull run in the Indian markets.

The broader markets outperformed the benchmarks with the Nifty Midcap 100 and Smallcap 100 gaining 3 percent each as the benchmark indices kept up the rally for the fifth week in a row.

In the upcoming week, we feel investors' attention will mostly be directed towards the release of services PMI data from India, the US and China, and the RBI policy meet.

The FII flow turned positive in November after sharp outflows marking the the previous three months.

FIIs have net bought Rs 10,593 crore worth of shares in the cash segment in the passing week, and their net buying for November stood at Rs 5,795 crore, while domestic institutional investors have seen net purchases of Rs 4,354 crore during the week, and Rs 12,762 crore for November.

Technically, the market is looking strong with the Nifty50 eyeing 20,500 mark, with support at 20,000 mark given the positive vibes in last five weeks, but in between some consolidation can't be ruled out given the consistent upward rally.

As long as the index holds 20,000 (psychological mark-19,800 low of the week), marching towards 20,500 looks likely in the coming days despite intermittent consolidation. With the hurdles placed at 20,350-20,400, where 20,000 will act as an immediate support.

The weekly options data indicates that 20,400-20,500 can be the resistance area for the Nifty, with support at 20,000-20,200 zone.