On December 12, 2023, the stock market exhibited cautious sentiments ahead of the Federal Open Market Committee (FOMC) meeting outcome, leading investors to opt for profit-taking. The Nifty50 remained rangebound, finding support at 20,850-20,800 levels and facing resistance at 21,000-21,100 levels. Analysts suggest that as long as the Nifty holds the immediate support, the market may continue its rangebound trade. However, a sustained trading above 21,000 for a few days could pave the way for another leg of the rally.

The BSE Sensex fell 378 points to 69,551, while the Nifty50 declined 91 points to 20,906 on December 12. A bearish candlestick pattern, resembling a Bearish Engulfing, was formed on the daily charts, indicating a potential trend reversal. Analysts noted a shift in the price chart for Nifty, hinting at the exhaustion of bullish strength and a possible correction after the recent rally.

From a technical standpoint, immediate support for Nifty is seen at 20,850-20,800, followed by a bullish gap around 20,700. On the upside, resistance is anticipated at 21,000-21,040, with a significant hurdle at 21,100.

Technical research analysts have varied opinions, with some anticipating consolidation in the Nifty over the next few trading sessions. Despite the current dip, the overall trend is viewed as positive, and analysts suggest considering it as a buying opportunity.

In terms of broader market trends, the market breadth favored bears, but the Nifty Midcap 100 index was up 0.4 percent, and the Smallcap 100 index gained 0.03 percent.

Here are key data points and observations:

Nifty and Nifty Bank Levels:

Nifty is likely to face immediate resistance at 21,002, followed by 21,043 and 21,108. Support levels are expected at 20,872, 20,832, and 20,766.

Bank Nifty, on December 12, faced pressure, falling 217 points to 47,098. A bearish candlestick pattern was formed, and lower-end support is seen at 46,800.

Options Data:

On the Call side, the 21,000 strike had the maximum open interest (OI), acting as a key resistance level. Call writing was observed at the 21,000 strike, with meaningful additions.

On the Put front, the 20,900 strike had the maximum open interest, serving as a key support area. Put writing was notable at the 20,500 strike.

Stock Movements:

Stocks with high delivery percentage included Maruti Suzuki India, HCL Technologies, Larsen & Toubro, Hindustan Unilever, and Dabur India.

Long build-up was observed in 40 stocks, while 63 stocks saw long unwinding, and 59 stocks saw a short build-up.

Short-covering was seen in 24 stocks, including ICICI Bank, HCL Technologies, Persistent Systems, TCS, and L&T Technology Services.

Put Call Ratio (PCR):

The Nifty PCR dropped below 1 for the first time in the last 11 consecutive sessions, indicating a shift towards more Call options and suggesting an increase in bullish sentiment.

Bulk Deals:

Private equity major Bain Capital is set to sell a further stake in Axis Bank via a fresh block deal worth $444 million.

Wipro has entered into a new agreement with RSA, one of the world’s leading general insurance companies.

Laurus Labs received five observations from the US FDA for its manufacturing facility in Visakhapatnam.

Funds Flow:

Foreign institutional investors (FIIs) net bought shares worth Rs 76.86 crore, while domestic institutional investors (DIIs) purchased Rs 1,923.32 crore worth of stocks on December 12.

Stocks in the News:

Axis Bank, Wipro, Laurus Labs, Indian Bank, Force Motors, and Shilpa Medicare were among the stocks making headlines.

F&O Ban:

Zee Entertainment Enterprises was added to the F&O ban list for December 13 on the NSE.

Investors are advised to exercise caution and seek advice from certified experts before making investment decisions. The market dynamics may be influenced by the outcome of the FOMC meeting and other global factors.