How Will the Nifty Move Over the Next Two Weeks?

Dec 13, 2019

Apurva Sheth, Editor,Profit Hunter Pro

Hi, this is Apurva Sheth coming to you in the Fast Profit Daily.

Today, I want to talk to you about the Nifty and how it could move before the end of 2019.

After the tax cut in September, the markets moved up but faced resistance around the range of 11,700 and 11,800.

Now this level is acting as a support.

In today's video...

  • Will the 11,800 support for the Nifty hold for the rest of the month?
  • If yes, then what is the key short-term resistance level you should look out for?
  • What does the latest technical trend of the Nifty tell us?

I hope you enjoy the video. I'll be back next Friday on the Fast Profits Daily.

Vijay will be back with his next video on Monday morning.

Have a profitable day!

Hi, I'm Apurva Sheth and today, I am very excited to bring this latest addition of Fast Profits Daily.

Now going forward, I will talk to you every Friday, whereas Vijay will speak for the first 4 days of the week. So do make a note of it.

Now Vijay has spoken about his outlook on the Indian stock markets. He has spoken about things like the US presidential cycle. Now in this cycle, generally, the stock markets, the US markets start moving higher just ahead of the elections. The inflation starts dropping, whereas the dollar starts getting stronger, and the employment outlook certainly improves. So this is with respect to the US presidential cycle.

Apart from this, he has also spoken about the Santa Claus rally wherein markets start railing in the month of December. This is because the FIIS and fund managers who have invested across the globe, start booking profits, so that they can enjoy their Christmas season and with a fat pay check.

Apart from this, Vijay has also spoken about the sectors which generally do well in the budget. So sectors like fertiliser, which normally get subsidy are in focus. Railway stocks also a remain in focus, and stocks which are generally best to avoid are the sin stocks, like cigarette companies, the gambling companies, the junk food industries. So all these sectors are worth avoiding.

Now, Vijay has shared his outlook on the Indian markets from a medium-term perspective but today, I want to talk about the Indian stock markets from a very short-term perspective.

Now today I will give you the outlook of Indian markets for the month of December. So markets have been dropping. After hitting the high of 12,100 markets have been dropping down for the last two weeks.

It's only during this week that the markets have started moving higher. They've bounced back after after almost touching the levels of 11,800. So where are they headed next?

Now I believe markets are likely to remain positive and could probably trade in a sideways range. Now, there are three reasons why I believe so and given that the markets have fallen in the first half of December, there are chances that markets may recover in the remaining part of the month.

Now what are the reasons behind it? There are three reasons why, I believe that markets could bounce back in December.

So the first reason is that in the history of Indian stock markets, December has been the most positive month. Markets have ended on a positive note in 75% of the time over the last 24 years.

So 18 out of the last 24 years, markets or the index has ended on a positive note. Now, the average gains over the over these 24 years for December are 3.61%.

Now the second-best month is July, with an average gain of 1.61%. So you can see that December is generally a very strong month and with strong gains as well.

Now second reason being the price action is very positive. Now, here is a chart in front of you. Now, this is a 75-minute chart of Nifty for the last 50 days.

So as you can see, the markets have been trading in a range between these green and red lines. So the green line at the bottom is placed at 11,800, whereas the red line at the top is placed at 12,100.

Now after the markets moved up following the tax cut in September, markets faced resistance around the range of 11,700 and 11,800. Now this range, which earlier acted as a supply zone, is now acting as a demand zone. Markets have not fallen below 11,800-levels.

And on the top end of the range, which is at 12,100 as you can see, markets have found resistance on several occasions around the range of 12,100 to 12,150.

So this is the range which market has been trading over the last 50 days. Now, the Nifty is very close to the level of 11,800 and it's been bouncing back over the last one or two days. So it's unlikely that the markets would fall below 11,800-levels given that it is a very strong support.

Now, apart from that, as you can see on the chart, the market has also broken out of a falling wedge pattern. Now a falling wedge pattern is nothing but a cone-shaped pattern, where the highs and the lows are converging and markets have broken out of this pattern. So this is a bullish pattern and a breakout from this pattern suggests that the markets could move higher.

So these are the three things that suggests that markets are unlikely to drop below the 11,800 mark and given that the Santa Claus rally is already in force all across the globe, chances are high that our markets could also bounce back.

So for the next one or two weeks, markets could trade with the positive bias and towards the end of the December month, markets could trade sideways, simply because the trading volumes would start dropping, as the FIIs and fund managers would start going on leave. So the trading action would obviously drop.

So that's how the markets are likely to pan out over the next 10 to 15 days. Now, I hope that you enjoyed this video and in case if you did, then make sure that you like it, share it, and subscribe to our channel.

Thanks a lot, and have a nice day.

Warm regards,

Apurva Sheth
Apurva Sheth
Analyst, Fast Profits Report
Equitymaster Agora Research Private Limited (Research Analyst)

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