Markets may remain sideways until end of the year; 5 key things to know for before opening bell

Markets are expected to remain sideways until the end of the year due to lack of triggers. Q3 results season, build up to Budget session are key events that the market would be looking for in January.

Markets
Markets are expected to remain sideways until the end of the year due to lack of triggers. (File Photo REUTERS)

In a volatile trading session on Monday, both BSE Sensex and Nifty 50 ended higher. While Sensex ended 296 points or 0.52 per cent up at 57,420.24, broader Nifty 50 index finished trade at 17,086, up 0.49 per cent or 82.50 points. Bulls are looking to maintain control on Dalal Street on Tuesday amid positive global cues. Trends on SGX Nifty indicate a positive start for Indian equities. The Nifty futures were trading around 17,266.20 level on the Singaporean Exchange.

“Global markets started the week on a soft note due trading holiday in various regions. FII selling has reduced sharply over the last few days due to the festive holidays. Markets are expected to remain sideways until the end of the year due to lack of triggers. Q3 results season and build up to the upcoming budget session would be key events that the market would be looking for in Jan 2022,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

Global cues

Asian markets rose on Tuesday morning trade after the S&P 500 closed at another record high on Monday. Japan’s Nikkei 225 led gains among the region’s major markets as it gained 1.07% while the Topix index advanced 0.98%. Hong Kong’s Hang Seng index hovered above the flatline while Hong Kong-listed Chinese tech stocks largely fell, with shares of Tencent down 1.78%, Meituan down 2.21%. The Hang Seng Tech index traded 0.58% lower. South Korea’s Kospi was little changed. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.13% higher.

U.S. stock indexes rose Monday as markets reopened after the Christmas holiday and investors assessed the threat from spread of the omicron Covid-19 variant. The S&P 500 gained nearly 1.4% to close at 4,791.19, 69th record close of the year. The index also hit an intraday record for the first time in over a month. The Dow Jones Industrial Average added 351.82 points, or roughly 1%, at 36,302.38 while tech-heavy Nasdaq Composite ticked up about 1.4% to 15,871.26.

Technical view

Nifty witnessed an excellent intraday buying from the lows on Monday and closed the day higher by 82 points. After opening on a downside gap of 66 points, the Nifty slipped into weakness in the early part of the session. A sustainable intraday upside recovery has emerged from a day’s low of 16833 levels and the upside movement continued towards the end. The opening downside gap has been filled completely. A long bull candle was formed on the daily chart with lower shadow. This bull candle has engulfed the previous negative candle partially on the upside. Technically, this pattern indicates a formation of bullish piercing line candle pattern, but formed at the wrong place at highs. Hence, one may expect further attempt to retest crucial overhead resistance of 17200 levels in the short term, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

We observe an interesting weekly sequence of two weeks of pull back rallies before showing sharp weakness from the highs during its negative sequence of lower tops and bottoms. Having started the new pull back rally from the lows of 16400 levels in the last week, the odds of continuation of this upmove is higher this week before showing another round of sharp weakness from the highs by next week. The short term trend of Nifty is slightly positive amidst a range movement. Further upside from here could encounter strong overhead resistance around 17200-17300 levels in the next few sessions and one may expect sell-on-rise opportunity. Immediate support is placed at 16930 levels, he added.

Key support, resistance levels for Nifty

The index has confirmed Hammer kind of candle on an Hourly chart which suggests strength for upside in the counter. Moreover, the index has been trading above 21&50-HMA which suggests strength in the counter. However, A momentum indicator STOCHASTIC trading with a positive crossover on the daily time-frame. At present, the Index has support at 16800 levels while resistance comes at 17180 levels, crossing above the same can show 17300-17400 levels. On the other hand, Bank nifty has support at 34200 levels while resistance at 35500 levels, said Palak Kothari, Research Associate, Choice Broking.

Stocks under F&O ban on NSE

Escorts, Indiabulls Housing Finance, Vodafone Idea, and RBL Bank are the four stocks under the F&O ban for Tuesday (28 December). Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.

IPO Watch

Supriya Lifescience Ltd listing: Shares of Supriya Lifescience Limited are going to debut today on the bourses. The equity shares of Supriya Lifescience Limited shall be listed and admitted to dealings on NSE and BSE in the list of ‘B’ Group of Securities in a Special Pre-open Session. As per experts, the stock is expected to list in the range of Rs 360 to Rs 430 per share levels. Grey market premium of Rs 150 is also signaling strong listing.

CMS Info Systems Ltd share allotment: The share allotment status of CMS Info Systems Limited’s initial public offering (IPO) is likely to be finalised today, December 28, 2021. Investors can check the CMS Info Systems IPO allotment status online by visiting the official website of BSE or the registrar of the IPO (Link Intime India Private Ltd), once it is finalised. The public issue opened for subscription on 21 December, and closed on 23 December 23. The issue was subscribed 1.95 times on the final day of the bidding process.

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