Dalal Street Week Ahead: DECEMBER 2ND Week | 2024 | P R Sundar

Summary

In this market update, PR Sund discusses the recent volatility in the Indian stock market, including the breakout of Nifty from the 24,000-24,200 range. He highlights the performance of key sectors like stocks and banking, and emphasizes a likely consolidation period for the rest of December, with Nifty expected to trade between 24,500 and 25,150. The video also covers upcoming US and European economic data, expected market range-bound activity, and trading strategies based on open interest and Fibonacci retracement levels. The outlook for January points to potential corporate earnings-driven volatility.

Takeaways

• 😀 The Nifty broke out of the 24,000–24,200 range on Thursday, marking the most volatile day in the Indian stock market last week.
• 📊 December is typically a lackluster month for the stock market, but the Nifty has already moved about 350–400 points this month, despite a 400-point drop on the last day of November.
• 💼 The banking and stock sectors have performed well recently, with Reliance recovering 70–80 rupees from its recent low.
• 🔍 The market is expected to consolidate for a few days before potentially resuming an uptrend, contingent on continued strength in stocks like Reliance and HDFC Bank.
• 📅 Key economic data this week includes US inflation data (Wednesday–Thursday), the European Central Bank's rate decision (Thursday), and India's CPI inflation data (Friday).
• ⚖️ There is no major economic data expected to trigger significant market movement in the short term, suggesting a consolidation phase ahead.
• 💡 The Nifty is likely to trade between 24,500 and 25,150, with 25,000 acting as a round-number psychological resistance and 25,150 as technical resistance at the 61.8% Fibonacci retracement level.
• 📉 Volatility (VIX) is low, trading below 15, indicating limited large movements in the market until January.
• 🔄 Option premiums are expected to decline due to time decay, with a broader market range expected between 23,800 and 25,150 over the next three weeks.
• 📅 The next big action in the market is likely to occur in January when corporate earnings start being released, starting from the second week of the month.

Q & A

What was the reason for the absence of recent video updates from PR Sund?

PR Sund mentioned that there was a technical issue, and he was too busy, which led to the absence of video updates on Friday and the previous day.

What is the upcoming workshop mentioned in the video about?

PR Sund is hosting a workshop in Dubai for people interested in both the US and Indian stock markets. The workshop will cover the strengths and weaknesses of both markets.

Why was last Thursday considered the most volatile day in the Indian stock market?

Last Thursday was considered highly volatile because Nifty broke out of its range of 24,000–24,200 in just one day, marking a significant movement.

What trend did the Indian stock market experience after the initial breakout on Thursday?

After the breakout on Thursday, the market saw some profit booking over the next few days. This was followed by a cycle of buying for a few days, then selling again, and so on.

What is the expected trend for the Indian stock market in December?

PR Sund expects the market to remain relatively quiet in December, which is traditionally considered a lackluster month for major moves. However, Nifty has already moved about 350-400 points in the December series.

What is the significance of the 400-point drop in Nifty on the last trading day of November?

The 400-point drop on the last trading day of November is important because, when factored in, Nifty's overall movement in December becomes less dramatic, amounting to a more moderate rise of 350-400 points.

Which sectors and stocks have outperformed recently according to PR Sund?

According to PR Sund, both stocks and banking stocks have outperformed recently. He specifically mentioned Reliance, which has recovered about 70-80 rupees from its recent low, and HDFC Bank, which has also performed well.

What are the key technical levels mentioned by PR Sund for the Nifty index?

PR Sund highlights two important Fibonacci retracement levels: the 55% retracement at 24,800 and the 61.8% retracement at 25,150. These are crucial resistance points for Nifty.

What is the expected market range for Nifty in the coming weeks?

PR Sund expects Nifty to trade within a broad range of 24,500 on the downside and 25,150 on the upside, with a possibility of consolidation between these levels.

What is the outlook for the Indian stock market until January?

PR Sund predicts that the market will likely remain in a range-bound consolidation phase with a slight positive bias. Significant moves are expected only in January when corporate earnings reports start coming in.