Trade Setup for December 24: Experts unsure if positive momentum will sustain

The market ended the day higher, breaking a five-day losing streak, but retreated from its intraday highs. Key heavyweights like Reliance Industries, ITC, and HDFC Bank played a significant role in Nifty's recovery.

The Nifty 50 index opened with a gap up and traded within a narrow range, closing at 23,753.45, still below the crucial 200-day moving average (DMA).

Key Stock Movements:

JSW Steel: ₹937.05 (+2.15%)

ITC: ₹474.25 (+2.07%)

Hindalco Industries: ₹634.15 (+1.85%)

IndusInd Bank: ₹945.70 (+1.75%)

Trent: ₹6,946.00 (+1.68%)

While financial stocks outperformed, pushing the Nifty Bank index up by over 1%, the market lacked strong conviction, as bearish sentiment remained dominant. Notably, shares of India Cements Ltd. surged 11% after the Competition Commission of India (CCI) cleared UltraTech Cement's ₹7,000 crore acquisition of a majority stake.

Expert Insights:

Ajit Mishra of Religare Broking cautioned that the gains seen in the market might be part of a relief rally, with the real challenge being the sustainability of these moves. "Occasionally, oversold stocks like HDFC Bank and Reliance Industries attract buying interest, lifting the indices. However, it's uncertain whether this momentum can continue."

Global markets are beginning the holiday-shortened week on an upbeat note, but this could be temporary.

Nifty50 Technical Outlook:

After a sharp decline in recent sessions, the Nifty showed a relief rally, closing 165 points higher. According to Nagaraj Shetti of HDFC Securities, the near-term trend remains weak, and the recent bounce could be a "sell-on-rise" opportunity. Resistance is expected at 23,900-24,000 levels, while the next support lies at 23,500. A decisive move above 23,850 could lead to a recovery towards 24,000-24,400, while a breach of 23,540 could signal further weakness, according to Rupak De of LKP Securities.

Shrikant Chouhan of Kotak Securities identified 23,650/78,300 and 23,550/78,000 as key support zones, with the 200-day SMA acting as resistance at 23,850/78,800 and 24,000/79,300.

Nifty Bank Outlook:

The Nifty Bank index ended the session at 51,317.60, gaining 1.10%, thanks to strong buying interest. Om Mehra of SAMCO Securities noted a rebound in the daily RSI from oversold levels, suggesting a potential short-term base formation. Resistance is expected at 51,800, with a move above this level potentially testing 52,100. Support has shifted higher to 50,700, providing a short-term base for the index.

Stocks to Watch for December 24:

Indian Bank: Faces a penalty of LKR 2 million from the Central Bank of Sri Lanka for non-compliance with the Financial Transactions Reporting Act (FTRA).

MIC Electronics: Receives approval for a capacity and capability assessment related to GPS-based Public Address & Passenger Information Systems (PAPIS) and LED Destination Boards in AC & Non-AC ICF & LHB Coaches.

Disclaimer: Please consult certified experts before making any investment decisions.