Nifty consolidation likely ahead of Fed's Rate decision on December 17

After a volatile session on Friday, the Nifty Index has returned to consolidation, trading within a defined range. It ended with a slight negative bias, giving back some of the strong gains seen earlier in the week. Despite these fluctuations, the index continued to respect both sides of the range during Monday's session.

Key data from Monday shows a nearly balanced Advance-Decline ratio, with advances marginally outnumbering declines. On the Nifty Midcap Index, 67 stocks saw gains, while 58 stocks on the Nifty Smallcap Index finished in the green.

The upcoming week is expected to be pivotal, as 22 central banks, including the US Federal Reserve, Bank of England, and Bank of Japan, are set to announce their monetary policy decisions. While market participants have priced in most rate changes, investors will be closely monitoring the central banks' future guidance, which could spark volatility.

Market Range and Levels:

Monday's 180-point range saw the Nifty successfully defend support at 24,600, but resistance at 24,800 remains a hurdle. The previous week's high of 24,857 is a crucial pivot point for the index, marking a key level for potential upward momentum towards 25,000. On the downside, supports have formed at 24,600 and 24,500, with the 50-Day Moving Average at 24,400 acting as a stronger base.

Analyst Views:

Nagaraj Shetti of HDFC Securities believes the Nifty's near-term uptrend remains intact, and he expects an eventual breakout above 24,800. His strategy is to buy on dips, with immediate support at 24,550, as the long-term trend remains positive.

Shrikant Chouhan of Kotak Securities suggests that 24,600-24,550 is a critical support range for day traders. He sees 24,800-24,850 as resistance, and advises exiting long positions if the index falls below 24,550.

Nifty Bank Outlook:

The Nifty Bank Index traded within a 400-point range on Monday and faced resistance at the 53,800 mark, ultimately closing near its Friday levels. The index remains approximately 900 points below its all-time high of 54,467.

Om Mehra of SAMCO Securities maintains a positive view as long as the Nifty Bank stays above its middle Bollinger band and the Relative Strength Index (RSI) holds above 60. Immediate support is at 53,000, with resistance at 54,100. Hrishikesh Yedve of Asit C Mehta Investment Intermediates expects the Nifty Bank to consolidate within 52,500-54,000, requiring a hold above 54,000 for further upside.

F&O Cues:

Fresh Long Positions: Stocks like Coromandel International, Nykaa, HUDCO, Prestige Estates, and Macrotech saw fresh long positions, with both price and Open Interest rising.

Fresh Short Positions: Stocks such as IRFC, Poonawalla Fincorp, Adani Green Energy, Delhivery, and Jindal Stainless saw short positions, with increasing Open Interest despite price declines.

Short Covering: Manappuram Finance, Max Financial, Glenmark, KEI Industries, and CAMS experienced short covering, with price increases and declining Open Interest.

Stocks to Watch on Tuesday:

Vedanta: Declared a fourth interim dividend of ₹8.5 per share for FY25, with a record date of December 24, 2024.

Wipro: Set to acquire 100% of Applied Value Technologies and affiliates for $40 million.

Indus Towers: ITAT ruling in favor of the company, reducing contingent liabilities by ₹3,500 crore.

Mindspace REIT: Abu Dhabi Investment Authority to sell a 9.2% stake worth ₹1,903 crore via block deals.

Gravita India: Launching QIP to raise ₹750 crore, with a floor price of ₹2,206.49 per share.

GMR Airports: November passenger traffic up 14%, with a notable rise in both domestic and international traffic.

Adani Wilmar & Auto Component Makers: GST relief on rice bran oil and auto components unlikely, as per sources.

Texmaco Rail: Secures ₹187.41 crore order from Chhattisgarh State Power Transmission Co.

Varun Beverages: Acquires a 39.93% stake in Lunarmech, making it a wholly-owned subsidiary.

Other notable stocks include TCS, HCC, HPCL, Gravita India, and RailTel, with significant corporate actions and orders expected to influence stock performance. Keep an eye on market reactions to the upcoming central bank decisions for further direction.