Samvat 2079 has been a cracker of a year for the equity markets. The key benchmark indices, started trade for Samvat 2079 with a strong gap-up and went on to build gains as the year progressed.
Will Samvat 2080, to be another gainful year for the markets?
Given the recent consolidation in the market, select key indicators are flashing signs of caution going ahead. Further, the market is likely to remain choppy owing to geopolitics worries, volatile crude oil prices, high bond yields, global central banks action and general elections back home.
For now, it seems like the markets will keep investors guessing in the first half of Samvat 2080!
Here's what the charts suggest:
S&P BSE Sensex
Current Price: 64,930
Likely Range: 58,300 - 71,700
The S&P BSE Sensex registered a new summit at 67,927, and has rallied nearly 10 per cent so far in Samvat 2079. According to the yearly Fibonacci charts, the Sensex can potentially swing in the range of 58,300 - 71,700 in Samvat 2080. Interim support for the BSE benchmark index can be expected around 62,600 - 60,850 - 59,600. Whereas, on the upside, the Sensex can test 67,400 - 69,100 - 70,400.
NSE Nifty 50
Current Price: 19,415
Resistance: 20,100; 20,222
Downside Risk: 18,100
The NSE Nifty has seen a steady climb since its breakout above the 20-MMA (Monthly Moving Average) in August 2020. The index has zoomed over 88 per cent in the following 2.3 years. In Samvat 2079 alone, the Nifty has surged over 16 per cent.
As things stand presently, there seems a clear divergence between the price action and trend indicators on the monthly chart since August 2023. The Nifty scaled a fresh peak of 20,222 in September, whereas the RSI (Relative Strength Index) has seen a lower top, lower bottom formation. Further, the Stochastic Slow too is in favour of a downside, while the MACD (Moving Average Convergence-Divergence) is at crossroad- awaiting a clear direction.
As such, the recent peak of 20,222 seems to be an immediate resistance for the Nifty going ahead. On the downside, the 20-MMA, which has consistently provided support in the last 2.3 years, is likely to act as a major support once again. The 20-MMA for the Nifty stands at 18,100, thus suggesting up to 7 per cent downside risk.
Given the mixed indications on the longer-term chart, the Nifty is likely to exhibit high volatility in the coming period. In case, support at the 20-MMA fails to hold a steep slide towards 16,000-mark cannot be ruled out.
On the upside, the Nifty will have to trade consistently above 20,100-level, in order to reverse the present negative set-up on the longer-term chart.
CLICK HERE FOR THE CHART Nifty MidCap
Current Price: 40,385
Resistance: 41,250
Downside Risk: 33,000
The Nifty MidCap index rallied over 55 per cent in the first six months of the fiscal year 2023-24; thereafter the index has entered into a phase of consolidation. The monthly chart suggests that the index may exhibit a tepid movement as long as it sustains below the higher-end of the Bollinger Bands, which stands at 41,250.
Among key momentum oscillators, the MACD is still in favour of the bulls; hence the Nifty MidCap may attempt to breakout or tread along the higher-end of the Bolling Bands for some time now. However, the RSI is flashing a caution signal, and seems to be in the process of making a lower top.
Given the confliction signals, investors will need to track levels closely and fresh developments on the chart for a clear trend going ahead.
As of now, failure to breakout above 41,250, could induce some downward pressure, and the index may dip towards its 20-MMA, which stands at 33,000-mark - suggesting a potential downside risk of over 18 per cent.
CLICK HERE FOR THE CHART Nifty SmallCap
Current Price: 13,374
Resistance: 13,400
Downside Risk: 10,900
The Nifty SmallCap index looks the strongest among the lot. The index is presently quoting above the higher-end of the Bollinger Bands on the monthly chart. This suggests, that the bias is likely to remain bullish as long as the Nifty SmallCap index sustains above 13,125.
On the upside, the index is seen testing the trend line resistance 13,400 level. Given the positive bias in the momentum oscillators, the index may attempt to breakout above the trend line, and usher a new phase of bull-run.
In case of a breakout, the index can potentially another 10-15 per cent, suggesting an upside target of 14,750 - 15,400 on the Nifty SmallCap index.
On the flip side, in case, the index fails to breakout and trades consistently below 13,125 level, a corrective move towards 10,900-odd level seems possible.
CLICK HERE FOR THE CHART