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The US equity markets cheered the victory of Donald Trump in the US Presidential Elections last week. The Dow Jones Industrial Average surged to a new high after the election outcome. But that did not have much impact on the domestic markets.
The Nifty 50 and Sensex bounced, but did not sustain. Both the indices have come off from their highs giving back all the gains and close lower for the week. Failure to sustain the bounce keeps alive the possibility of seeing one more leg of fall from here. After this fall, the broader uptrend can resume.
The Nifty Bank index on the other hand continues to oscillate in a sideways range. The consolidation is likely to continue for some more time before a fresh leg of rally begins.
Among the sectors, the BSE Realty index fell the most by 4.12 per cent. This was followed by the BSE Power index which was down 2.45 per cent. The BSE IT index outperformed last week. The index was up 3.61 per cent.
More outflows
The Foreign Portfolio Investors (FPIs) continue to sell Indian equities. The equity segment saw a huge outflow of about $2.14 billion last week. The month of November started on a weak note as the net outflow for the month stands at $2.37 billion for now. Continuous selling from the FPIs can keep the Sensex and Nifty under pressure.
Nifty and Bank Nifty Prediction for the week 11 Nov'24 to 15 Nov'24 by BL GURU
Nifty 50 (24,148.20)
Nifty continues its struggle to breach 24,500 decisively. The index made a high of 24,537.60 and has come off from there. It closed the week at 24,148, down 0.64 per cent.
Short-term view: Failure to rise past 24,500 keeps the head and shoulder formation well intact on the charts. Strong resistance is in the 24,500-24,700 region. As long as the Nifty stays below this resistance zone it is vulnerable to break the 24,000-23,800 support zone. Such a break can take it down to 23,500-23,300 or even 23,000 in the short term. A strong bounce thereafter can take the Nifty up to 24,000 and higher again.
To avoid the fall to 23,500 and lower, Nifty has to sustain above 24,000 and breach 24,700. In that case, 25,000-25,300 can be seen in the short term.
Chart Source: MetaStock
Medium-term view: We reiterate that the recent fall is a correction within the overall uptrend. There is room to see 23,000 on the downside as mentioned above.
The level of 23,000 is a strong support which can halt the fall. A fresh rally from around 23,000 will have the potential to take the Nifty up to 25,000 again. That will also bring back the earlier bullish view of seeing 27,000 on the upside.
This bullish view will get negated only if the Nifty breaks below 23,000. Such a break can drag it down to 22,000 and 21,000 thereafter.
Nifty Bank (51,561.20)
Nifty Bank index continued to oscillate within the 50,200-52,600 range for the fifth consecutive week. Within the range, the index rose to a high of 52,493.95 and came down from there. It has closed at 51,561.20, down 0.22 per cent. Since the sideways range is intact, there is not much change in the view.
Short-term view: Considering the turnaround last week, chances are high for the Nifty Bank index to come down towards 50,200, the lower end of the range this week. As mentioned last week, 50,000-53,000 can slightly be a broader range of trade.
A break on either side of 50,000-53,000 will decide whether the Nifty Bank index can rise to 54,000-55,000 or fall to 49,500-49,000.
Chart Source: MetaStock
Medium-term view: The bias is positive with strong support in the 49,500-49,000 region. As long as the Nifty Bank index stays above this support zone, the outlook will be bullish to see 57,000-58,000 on the upside in the coming months.
So, any dip below 50,000 towards 49,500-49,000 will be a very good buying opportunity from a long-term perspective.
The outlook will turn bearish only if the index declines below 49,000. If that happens, 47,000 can be seen on the downside. But that looks less likely.
Sensex (79,486.32)
The resistance at 80,500 on the Sensex continues to cap the upside. The index touched a high of 80,563.42 and has come down . It closed the week at 79,486.32, down 0.3 per cent.
Short-term view: The immediate outlook is unclear. The 80,500-81,000 region will continue to act as a good resistance. As long as the Sensex remains below 81,000, the bias is negative to see a fall to 78,000 in the near term. It will also keep alive the danger of the fall extending to 77,000.
A strong rise above 81,000 is needed to turn the outlook bullish. Only then the doors will open for a rally to 82,000-83,000.
Chart Source: MetaStock
Medium-term view: The region around 77,000 is a strong support which can halt the fall. A fresh leg of rally from around 77,000 can take the Sensex up to 88,000 over the medium term.
This view will get negated if the Sensex declines below 77,000. In that case, a fall to 75,000 can be seen.
Dow Jones (43,988.99)
The Dow Jones Industrial Average surged breaking above the intermediate resistance at 42,600. Trump winning the US Presidential Election triggered the rise last week. As such, the rally to 44,000 has happened much faster than expected. The Dow Jones touched a high of 44,157.29 before closing the week at 43,988.99, up 4.61 per cent.
Chart Source: MetaStock
Outlook: A strong and crucial resistance is around 44,500 which can halt the current rally. We expect the Dow Jones to reverse lower from around 44,500. That will trigger a corrective fall to 41,500.
As such, it is time to turn cautious on the Dow Jones for a correction rather than becoming overly bullish.
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