Trade setup for December 10: Will a non-directional Nifty keep traders on the sidelines?

The Nifty index entered the new trading week in a consolidation phase, with a narrow trading range and lower volumes. This trend is expected to continue as we approach the year-end. On Monday, the Nifty oscillated within a 120-point range, marking the narrowest range since November 1, when the index saw just a 90-point swing.

The rangebound activity saw the Nifty struggling to breach the 24,700 level on the upside, while finding support around 24,550 on the downside. Despite the lack of a clear directional trend, sector-specific movements continued. While stocks like L&T and HDFC Bank gained, losses were seen in Reliance Industries, ICICI Bank, and FMCG stocks such as HUL and ITC. The FMCG sector was notably impacted by a margin warning from Godrej Consumer.

In the pharmaceutical space, contract manufacturing stocks like Laurus Labs, Syngene, and Divi’s also saw significant declines. Syngene, in particular, is expected to remain in focus due to a potential block deal, where promoter Biocon may reduce its stake.

Looking ahead to Tuesday’s session, traders will be keeping an eye on developments in the currency and bond markets, especially following the appointment of Sanjay Malhotra as the new Reserve Bank of India Governor, replacing Shaktikanta Das. Additionally, inflation data, both from India and the US, is expected to be closely watched, as it could influence future rate cut expectations from the Reserve Bank of India.

Foreign and Domestic Institutional Activity: On Monday, foreign institutions were net buyers in the cash market, while domestic institutions were net sellers at twice the volume of foreign buying.

Key Levels to Watch:

Immediate Support: 24,500-24,450

Resistance on the Upside: 24,700-24,775

Nifty Bank Support: 52,850-52,500

Nifty Bank Resistance: 53,900-54,000

Stock-Specific Action:

Long Positions: Supreme Industries, APL Apollo, SJVN, Delhivery, Kalyan Jewellers saw fresh long positions.

Short Positions: Sona BLW, Syngene, Oil India, Dabur, HFCL saw fresh short positions.

Short Covering: BSE, HAL, Escorts Kubota saw short covering.

Stocks to Watch on December 10:

Bharat Electronics: Secured orders worth ₹634 crore, pushing its total FY25 order inflow to ₹8,900 crore.

Tata Motors: May increase PV and EV prices by up to 3% from January 2025.

Vodafone Idea: Approves share issue worth ₹1,980 crore to entities within the Vodafone Group at a 39% premium to Monday’s closing price.

Brookfield REIT: Opens QIP to raise up to ₹2,800 crore to reduce debt.

Syngene: Biocon plans to reduce its stake via a block deal worth ₹660 crore.

NHPC: Board meeting on December 12 to consider revised borrowing plans.

IGL: To consider a bonus issue of shares at a board meeting.

Metropolis Healthcare: Acquires 100% stake in Core Diagnostics for ₹246.83 crore.

With the market expected to remain non-directional, traders may adopt a cautious approach, especially in light of upcoming economic data and stock-specific movements.