Indian equity markets are continuing their upward trend, ignoring global market weakness. Nifty has also finished an unfinished business by reaching an all-time high. However, the broader market continues to lag behind the momentum. The overall structure is still bullish, but there is some fatigue as the market does not receive support from global markets.
The December series began on a high note, with a healthy rollover and a Nifty futures premium of more than 130 points. FIIs' long positions in index futures are also at a two-year high. As a result, the market is overbought in derivatives, and it may consolidate or correct before resuming its bullish momentum.
On an immediate basis, 18500 put writers are showing strong confluence; therefore, Nifty will try to trade above 18500, but if it slips below that level, we can expect some profit-taking where 18325–18245 is the next support zone. On the upside, 18800/18888/19000 will be the next resistance levels.
Bank Nifty is also consolidating in the range of 42700-43300 with intraday volatility. If it manages to cross the 43,333 level, then we can see a move towards the 43700–44000 area. If it falls below 42700, we can expect some profit-taking towards the 42200–42000 range.
Immediate domestic factors will include Q3 GDP and monthly auto sales figures, after which the market will focus on the RBI credit policy and the Gujarat election. Globally, China's news flow may continue to cause volatility, while the dollar index, US bond yields, and crude oil prices will also be important factors.
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