Last Week

NIFTY opened the week with a gap-up at 17,393 and had a rather bullish close on Monday. The index continued the rally on Tuesday and Wednesday. However, the FED minutes forced NIFTY to open with a huge gap-down on Thursday and the index closed below 17,750. There was recovery on Friday and the NIFTY closed the week at 17,813, up 459 points or 2.64% on a week to week basis.

BANK NIFTY had a very bullish week after opening with a gap-up at 35,612. The index closed just below 36,500 on Monday and continued the rally until global negativity led to a gap-down opening on Thursday. However, BANK NIFTY tried to recover towards the close on Thursday and moved up on Friday before profit-booking by DIIs brought the index down to a close at 37,740, up 2,258 points or 6.36%.

There was profit-booking in NIFTY IT, owing to the recent rally and global sell-off in tech stocks. Hong Kong’s Tech index is at its lowest since May 2020.

Midcap and Small cap stocks followed the general trend.

Foreign Institutional Investors net bought shares worth 1,000 crores last week. Domestic Institutional Investors net bought shares worth 3,300  crores.

The Manufacturing PMI was 55.5, which is expansion but at a slower pace. The Services PMI also was lower, at 55.5 and fell short of expectations.

The US markets had a bearish week. NASDAQ was the most affected index. The European markets were not as bearish as the US market but looked tired. However, FTSE had a good week. DOW JONES closed flat and FTSE closed in the green on Friday which is a positive indication. 

The Fed Minutes on Wednesday gave a pause to the rally in the US markets. The Minutes indicated that the interest rates will be hiked much earlier than expected. This led to a fall in the US market on Wednesday and this impacted the markets worldwide on Thursday.

Oil prices increased on supply worries as Kazhakstan is seeing an uprise. Also, there is a fall in output from Libya.

The US bond yields have gone up to 1.76%. 

Week Ahead

NIFTY has supports at  17,800, 17,725, 17,700, 17,650, 17,600, 17,550, 17,500, 17,400, 17,325.  We can expect resistances at 17,850, 17,900, 17,950, 18,000 and 18,040, 18,100, 18,200.

Nifty has the highest call OI build up at 18,000.

The highest put OI build up is at 17,500.

BANK NIFTY has supports at 37,700, 37,500, 37,300, 37,200, 37,000 and 36,900. and resistances at 37,800, 38,000, 38,100, 38,350, 38,500, 38,800 and 39,000.

The highest call OI build-up is at 38,000 and the highest put OI Build-up is at 37,000.

There will be no nationwide lockdown and this is a relief for the market. However, statewide restrictions will be imposed as the cases are rising.

DIIs were net sellers on Friday and this is happening after a very long gap. However, the quantity is little and both DIIs and FIIs were net buyers last week. This gives confidence to the bulls. 

We have results of large-cap stocks coming up this week starting with IT stocks on Wednesday. Infosys, TCS and Wipro results will be announced on Wednesday and HCL Tech results will be announced on Friday. HDFC Bank will announce the results on Saturday.

CPI Inflation for December will be announced on Wednesday in the evening. The industrial output data also will be out on the same day. Looking at global cues, we have inflation data to be released by USA and China on Wednesday.

BANK NIFTY had a fantastic week with a rally of over 2000 points and the index has to be closely watched this week. If banks continue their momentum, NIFTY can break the hurdle of 18,000 which has the largest call OI build-up. Reliance and TCS will have to stay strong as they did last week to help NIFTY to attain a close above 18,000 this week.

Do you think that Banks will be able to take NIFTY above 18,000 this week? Let us know in the comments section below.