The Indian stock markets experienced a sharp downturn, marking a significant reversal after a four-week winning streak. The Nifty50 index fell below its 200-day EMA, closing near 23,600, down 4.77% for the week. This decline, driven by broad-based selling across sectors, erased the gains of the past month. According to Puneet Singhania, Director at Master Trust Group, the next key support level for Nifty lies at 23,200, and resistance is observed in the 23,800-23,900 range, with a breakout above this zone potentially pushing the index towards 24,300. The overall market sentiment remains bearish, and traders should adopt a "sell-on-rise" strategy while keeping a close eye on support and resistance levels.
The Bank Nifty, which had been rallying to all-time highs, also faced a sharp correction, dropping 5.27% and closing below the 21-week EMA near 50,800. Puneet Singhania highlights key support zones at 50,200 and 49,800, with resistance between 51,000-51,200. A breakout above this resistance could propel the index toward 51,900. However, the overall strategy remains bearish, focusing on selling near resistance levels as the Bank Nifty struggles to regain upward momentum amidst negative technical signals.
With the India VIX, a key measure of market volatility, rising by 3.98% to 15.07, there is increased caution among traders. Choice Broking's executive director, Sumeet Bagadia, suggests buying specific stocks on December 23 while advising a cautious approach in the broader market. As volatility is expected to remain high, Bagadia's recommendations reflect a prudence-driven strategy amidst the prevailing bearish market conditions.
