The Indian stock market experienced a sharp correction during the week ending December 20, 2024, erasing nearly 5% of the gains accumulated over the past four weeks. Both the benchmark Nifty 50 Index and S&P BSE Sensex closed near their weekly lows at 23,857.5 and 78,041.59, respectively. The Bank Nifty also faced a heavy decline, dropping over 5% to close at 50,759.20. Among sectors, Metals and Utilities were the top underperformers, while Realty and Healthcare showed resilience, outperforming the broader market.
The Nifty 50 closed below its crucial 200-day Simple Moving Average (SMA) at 23,800, signaling a continued weak market sentiment. Technical experts suggest that as long as the Nifty remains below this level, it could face further downside, potentially slipping to the 23,400-23,200 range. On the other hand, if the Nifty rises above the 23,800 mark, it could trigger a pullback, with targets of 24,000. Similarly, for the Sensex, the key resistance is at 78,300, and a move above this level could indicate a continuation of the rally, pushing it toward 80,000.
For the Bank Nifty, the 200-Day Simple Moving Average (200-DSMA) at around 50,500 is seen as a strong short-term support level. On the upside, the next major resistance is placed near 51,660. Experts suggest that Bank Nifty’s performance will be crucial in shaping the near-term market outlook. The broader indices also faced pressure, losing about 3.5% for the week, reflecting the overall negative sentiment in the market.
Investors will need to closely monitor these key technical levels to gauge the market’s direction in the coming days, as the broader market sentiment remains fragile amid recent corrections.
