"Sensex Beats Nifty" Pre Market Report, Nifty, Bank Nifty, 16 Dec 2024, Range

Summary

In this pre-market report for December 16, 2024, the focus is on the Nifty and Bank Nifty indices, influenced by Sensex expiry manipulations. Despite negative global market trends, the Indian market saw a positive movement driven by unusual trading volumes, especially in the BC derivative market. The report discusses key technical indicators, showing bullish patterns in both Nifty and Bank Nifty, with resistance and support levels identified. The market is also affected by global economic events, such as U.S. inflation and China's economic data. Traders are advised to watch key support and resistance levels, with a cautious outlook ahead.

Takeaways

• 😀 Nifty closed over 200 points positive on December 13, 2024, but the increase is believed to be due to Sensex expiry, which can be manipulated by traders.
• 😀 December 5, 2024, saw the first Nifty expiry without any other index weekly expiry, and it was volatile, unlike the calm expiry on December 12.
• 😀 On December 13, 2024, the trade volume in the Sensex options market spiked dramatically to over 100 crore contracts, showing unusual market activity.
• 😀 The US and Chinese markets were both down on December 12, 2024, but India's Sensex surged, led by professional traders, even though the Nifty index had 10 stocks closing negative.
• 😀 Professional traders (pro traders) were primarily responsible for driving the Sensex up by trading 70 crore contracts in a single day.
• 😀 Despite a global negative momentum, including a drop in US markets, Indian ADRs were mostly positive, with some notable negative arbitrage in banks.
• 😀 The upcoming Fed meeting on December 18-19, 2024, could influence market sentiment, with predictions suggesting a 25-basis point interest rate cut, which may affect global momentum.
• 😀 The RBI's bi-weekly bank loan and deposit growth report showed lower growth in deposits and loans compared to previous weeks, which could negatively impact banks.
• 😀 Technical analysis of Nifty shows a bullish candlestick pattern on December 13, 2024, with support at 24,550 and resistance at 25,000 in the short term.
• 😀 For Bank Nifty, similar bullish momentum was observed, with key support levels at 52,800 and 53,000, and resistance between 54,000 and 54,300.
• 😀 Options data suggests that the 25,000 strike is a strong resistance for Nifty, with support at 24,500, while Bank Nifty's options data indicates significant support at 53,000.

Q & A

What event on 13th December 2024 caused the positive movement in Nifty and Bank Nifty?

The positive movement was largely driven by the Sensex expiry on 13th December 2024. The market was manipulated by professional traders, particularly in the Sensex derivative market, leading to a surge in trading volume and an artificial rally.

What unusual trading volume was observed on Sensex derivatives compared to typical levels?

On 13th December 2024, Sensex derivative trade volume surged to 100 crore contracts, a significant increase compared to the usual 1.5 lakh contracts seen in previous trading days.

Why is the Sensex expiry on 13th December considered an example of market manipulation?

The Sensex expiry on 13th December was considered manipulated because, despite negative global market trends, the Sensex saw a strong upward movement, largely driven by 100 professional traders, manipulating the market in a way that influenced Nifty and Bank Nifty movements.

What was the performance of global markets leading up to 13th December 2024?

Global markets were down due to concerns about high wholesale inflation in the U.S. and weaker-than-expected economic data from China. Despite this, the Indian market, particularly Sensex, showed an unusual rally.

What are the key levels of support and resistance for Nifty and Bank Nifty?

For Nifty, support is at 24,550, while resistance is at 25,000. For Bank Nifty, key support levels are at 52,800-53,000, and resistance is between 54,000-54,300.

What technical pattern did Nifty form on 13th December 2024, and what does it signify?

Nifty formed a bullish candlestick pattern with a long lower shadow on 13th December 2024. This indicates strong buying interest at lower levels, suggesting the potential for further upward movement.

How did Bank Nifty perform on 13th December 2024?

Bank Nifty opened lower, showed a similar price action to Nifty, and ultimately closed at around 53,580, forming a bullish candlestick pattern with a long lower shadow, indicating buying interest at lower levels.

What role did professional traders play in the market on 13th December 2024?

Professional traders were responsible for driving much of the trading volume in Sensex derivatives, with 70 crore of the 100 crore total contracts traded by them, creating an artificial upward movement in the market.

How did the global market and the U.S. Federal Reserve's actions influence the Indian market outlook?

The global market showed signs of weakness, particularly with a 2% drop in the U.S. Dow Jones. The Federal Reserve’s potential decision to cut interest rates could affect global momentum, which in turn could influence the Indian market, especially if the Fed surprises by not cutting rates.

What key economic data should be watched out for on 16th December 2024?

Key data to monitor includes China’s unemployment rate, retail sales, and industrial production growth, India’s wholesale inflation numbers, and the U.S. PPI data later in the night. These factors could affect global and local market sentiment.