Week Ahead

The market recorded the biggest weekly loss since June 2022, falling 4.77 percent for the week ended December 20, tracking weakness in the global counterparts.

The BSE Sensex plunged 4,092 points (5 percent) to close at 78,042, and the Nifty 50 tanked 1,181 points (4.8 percent) to 23,588. The Nifty Midcap 100 and Smallcap 100 indices were down by 3.53 percent and 3.57 percent, respectively, during the week. Selling pressure was also seen across sectors, barring pharma.

After the severe correction, the market is expected to consolidate with a negative bias and keep an eye on the trend in global peers and FII flow in the coming holiday-shortened week.

With the festive season approaching and global markets closed for 2-3 days, including a domestic holiday on December 25, market activity is expected to be low next week.

Technically, the Nifty 50 is definitely looking weak as it traded below 10-and 20-week Exponential Moving Averages (EMAs) as well as in the lower band of Bollinger Bands on the weekly charts. The momentum indicators RSI and MACD also showed negative bias on the daily as well as weekly charts, in fact on the daily scale the RSI reached 34 after failing to hold the 60 mark and the MACD dropped below the zero line, which is a negative sign. Further, the index closed below the 200-day EMA for the first time since November 21. Hence, the next target on the downside is expected to be 23,263, the November low, followed by 23,000, however in case of a rebound, 23,875 is the immediate target, followed by 24,050 on the higher side.

The options data indicates that the Nifty 50 is likely to be in the range of 23,000-24,000 in the short term as breaking on either side can give clear direction to the market.