Nifty Prediction Dec 26: Bullish Bias Holds? Experts Reveal Crucial Support & Resistance Levels!

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AuthorVihaan Mehta|Published at:
Nifty Prediction Dec 26: Bullish Bias Holds? Experts Reveal Crucial Support & Resistance Levels!
Overview

Indian stock markets, Sensex and Nifty, closed lower on Wednesday, December 24, ending a three-day rally amid volatile trade and subdued volumes. Analysts maintain a bullish outlook for Nifty's prediction on Friday, December 26, identifying support near 26,000 and resistance around 26,240-26,325. A stock-specific approach is recommended as the market anticipates consolidation.

Nifty Poised for Potential Gains Despite Midweek Dip

Indian equity benchmarks, the BSE Sensex and NSE Nifty, concluded Wednesday, December 24, on a subdued note, halting their recent three-day winning streak. The trading session witnessed volatility, with volumes remaining thin as market participants looked towards the year-end holidays. The Nifty index edged lower by 35.05 points, or 0.13 percent, settling at 26,142.10, after oscillating between an intraday high of 26,236.40 and a low of 26,123. The benchmark Sensex also declined, dropping 116.14 points, or 0.14 percent, to close at 85,408.70.

Market Conditions and Sectoral Performance

The subdued trading activity was attributed to the year-end holiday-shortened trading week and mixed trends observed in global markets. The markets remained closed on Thursday, December 25, for the Christmas holiday. Sectoral performance presented a mixed bag, with Nifty Media, Realty, and Metal indices closing in the green. Conversely, the banking sector faced selling pressure, evident in the Nifty Bank index's drop of 115.95 points, or 0.20 percent, to 59,183.60. The broader market indices also showed divergence, as the Nifty Midcap 100 slipped 0.60 percent, while the Nifty Smallcap index managed a gain of 0.28 percent. The India VIX, a gauge of market volatility, eased by 1.99 percent to settle at 9.19.

Top Gainers and Losers

Within the Nifty 50 constituents, 19 stocks managed to register gains. Trent emerged as the top performer, closing 2.26 percent higher. Other notable gainers included Shriram Finance, Apollo Hospitals Enterprise, Bajaj Auto, UltraTech Cement, Maruti Suzuki India, Coal India, Power Grid Corporation of India, Max Healthcare Institute, Mahindra & Mahindra, and Nestle India. On the downside, IndiGo (Interglobe Aviation), Adani Enterprises, Dr Reddy's Laboratories, Wipro, HDFC Life Insurance Company, Sun Pharmaceutical Industries, Hindustan Unilever, Asian Paints, Oil and Natural Gas Corporation, Reliance Industries, Tata Steel, Tata Consumer Products, Bajaj Finserv, Cipla, and State Bank of India were among the prominent laggards.

Expert Outlook and Technical Levels

Market experts maintain a cautiously optimistic view for the upcoming trading sessions. Vinod Nair, Head of Research at Geojit Investments, observed that the Indian stock market moved largely sideways, mirroring trends in broader Asian markets. He noted the potential positive impact of the Reserve Bank of India's recent liquidity initiatives, including Open Market Operations and USD/INR buy-sell swaps, expected to enhance systemic liquidity and stabilize currency volatility.

Technical analysts suggest a continued bullish bias for the Nifty. Nandish Shah, Deputy Vice President at HDFC Securities, highlighted a bullish higher-top, higher-bottom structure on the daily chart, with immediate support anticipated at the 26,000 mark. He identified the 26,240 level as immediate resistance, followed by 26,330.

Hrishikesh Yedve, AVP Technical and Derivative Research at Asit C Mehta Investment Intermediates, pointed to a shooting star candle formation on the daily chart, signaling selling pressure at higher levels. He expects the next significant hurdle in the 26,250–26,325 zone, while immediate support lies near 26,050, followed by 25,990. Yedve advises traders to adopt a stock-specific approach, anticipating consolidation within the 25,990–26,325 band in the short term.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, described the current price action as a brief pause after a strong rally. He believes this lackluster movement could be short-lived, with a potential for Nifty to bounce back sharply. Immediate support is seen at 26,000, with resistance around 26,300.

Impact

This analysis provides investors with key technical levels and expert sentiment regarding the Nifty's short-term direction. The emphasis on a stock-specific approach suggests opportunities in individual equities despite potential index consolidation. The RBI's liquidity measures aim to support market stability.
Impact Rating: 6/10

Difficult Terms Explained

  • Sensex: A stock market index representing the performance of 30 large, well-established companies listed on the Bombay Stock Exchange.
  • Nifty: A stock market index representing the performance of 50 large Indian companies listed on the National Stock Exchange.
  • Volatile session: A trading period characterized by significant and rapid price fluctuations.
  • Subdued trading volumes: Lower than average number of shares traded during a session, often indicating caution or lower participation.
  • Sectoral indices: Stock market indices that track the performance of specific industries or sectors (e.g., Nifty Bank, Nifty Media).
  • Nifty Midcap 100 / Nifty Smallcap: Indices tracking the performance of medium-sized and small-sized companies, respectively.
  • India VIX: A volatility index measuring expected market volatility over the next 30 days, known as the "fear gauge."
  • Nifty 50 pack: The group of 50 stocks constituting the Nifty 50 index.
  • Bullish bias: An expectation that the market or a particular stock will move upwards.
  • Higher-top, higher-bottom structure: A technical analysis pattern indicating an uptrend.
  • Support level: A price point where a downtrend is expected to pause or reverse due to buying interest.
  • Resistance level: A price point where an uptrend is expected to pause or reverse due to selling pressure.
  • Shooting star candle: A bearish candlestick pattern suggesting a potential reversal after an uptrend.
  • Consolidation: A period where an asset's price trades within a defined range, indicating a pause in the trend.
  • Stock-specific approach: An investment strategy focusing on individual stocks based on their merits.
  • Liquidity initiatives: Actions by a central bank to increase the money available in the financial system.
  • OMOs (Open Market Operations): A central bank tool involving buying/selling government securities to influence money supply and interest rates.
  • USD/INR buy-sell swap: A transaction to manage liquidity and exchange rates by simultaneously buying and selling US dollars against Indian Rupees.
  • Systemic liquidity: The overall availability of funds within the entire financial system.
  • Currency volatility: The degree of fluctuation in a currency's exchange rate.
Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.