Dated: 04/01/2025
Bulls are finally back & lead Nifty towards above 24000 successfully on a Weekly closing basis. The 200 DEMA enigmas worked perfectly as predicted & now 24000 remains a crucial support level in Nifty to remain afloat while on the upside any move if sustains above 24300 it’s possible that we may get another trajectory towards 24850 & 25200 in January series itself. As earlier anticipated the trend reversal did formed from the 200 DEMA & it’s highly likely to continue in the coming days as well.
The December month remained vigilant & the major grip was within the fist of FII’s with continues selling pressure with higher volatility. Since the beginning of the October 2024 month FII’s have done massive selling amounting to Rs. 1,70,864.11 crore combined of October, November & so far in wholesome of December 2024. This has lead the entire pressure on the Indian Domestic Equity Markets overall FII’s have sold nearly Rs. 3 Lacs cr. in the Calendar year 2024 while on the contrary DII’s were the main supporters of the entire Indian domestic Equity Markets with whopping buying of Rs. 1,68,286.25 cr. since the beginning of October 2024 & in the Calendar year 2024 they have bought more than Rs. 5 Lacs cr.
With Nifty holding up 200 DEMA which has now been tested twice since the beginning of October 2024 series the possible bottom formation & rebound in undeniable. Major crucial support now remains at a broader range of 23650-24000 kind of levels while medium term crucial support remains at 23000-23200 kind of levels with immediate hurdle now stands at 24300 any move above could give 24850-25200 subsequently in the January 2025 series. With major heavy weight counter underperforming if these levels worked perfectly this underperformance could end here.
However, this pre-news structured selling seems legit when Q2 GDP data was published last Friday where lower than estimated GDP came as “India’s GDP growth slows in Q2 FY 2024-25 to 5.40% while Fiscal Deficit at 46.50% of FY 2024-25 targets. It now looks like FII’s must have sensed earlier these possibilities of GDP slow down which lead them for a relentless selling. But now the eye’s rolled back into the soon coming Q3 GDP numbers which will be released by January 2025 end possibly.
US Federal Reserve cut interest rates by a quarter point on 14th December 2024 and signaled a slower pace of cuts ahead, amid uncertainty about inflation and President-elect Donald Trump’s economic plans. Policymakers voted 11-to-1 to lower the US central bank’s key lending rate to between 4.25 per cent and 4.50 per cent, the Fed announced in a statement. They also penciled in just two quarter-point rate cuts for next year, and sharply hiked their inflation outlook for 2025 which intern puts additional pressure not only on Indian markets but also on US markets as well.
The November series closing have shown good formation on Monthly charts where 23000-23200 followed by 23650-24000 now remains a major crucial support for a potential upside towards 24300 & 24850 respectively. However, major upside towards 26500-27000 could be seen till the end of February 2025 which instance is expected another ATH in the Nifty.
However, we have also clearly mentioned the expected potential upside could be supported by the FII’s net longs now stands as low as below 18% which continuously signifies & has formed the bottom formation somewhere near 23000-23200 which indeed has turned the game & bottom was formed in Nifty. Now we expect the FII’s long positions to rise towards 48% followed by 67% in the coming month ahead which may take Nifty & broader markets even on the higher levels.
In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:
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Sales report issue in December :
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Advance tax collection in FY till June 15 surged 27.6% to ₹1.48 lakh crore, with ₹1.14 lakh crore as corporate tax and ₹34,362 crore as personal income tax, indicating a strong economy and corporate performance.
The Centre’s gross tax collections (post refunds but before transfers to states), stood at Rs 4.6 trillion in the first two-months of the current financial year, 15.9% higher than the year year-ago level, data released by the Controller General of Accounts (CGA) showed on Friday. This is against 10.6% annual growth pegged in the Budget for FY25.
Net tax revenue (after refunds and after devolution to states) during April-May, stood at Rs 3.19 trillion, accounting for 12% of the Budget estimate of Rs 26.02 trillion. However, during the same period of FY24, net tax revenue had accounted for about 16% of the Budget target.
In the institutional segment the FII’s remained negative with net sell of Rs. 11,041.59 cr. & so far sold more than Rs. 1,70,864.11 cr. so far since beginning of October 2024 but here DII’s have been the buyer’s with Rs. 9,253.70 cr. last week. FII’s have been brutal but history has shown whenever FII’s have shown merciless selling pressure we somehow make another bottom supported by DII’s massive buying as monthly retail SIP data surpassed Rs.25,000 cr. p.m.
Nifty last week remained range bound with tight consolidation where neither bulls nor bears had any chance of winning. With merely 191.35 points gain i.e. 0.80% for the week Nifty remained into the consolidation to give a close at 24004.75. The coming week still have eyes on 200 DEMA with crucial supports lying at 23000-23200 while immediate supports standing right at 23650-24000 kind of levels while immediate hurdle stands at 24300 & any move above could give us 24850-25200 kind of levels. However, major upside towards 26500-27000 could be seen till the end of February 2025 which instance is expected another ATH in the Nifty. This time the major potential upside could be triggered by Nifty FMCG followed by Reliance Industries in Oil & Gas space.
Sensex on the other hand too remained in an extreme tight consolidation zone. With mere 524.04 points of gain i.e. 0.67% for the week it gave a close at 79223.11. This too could finds its crucial support within the defined range of 77000-78000 followed by 76000-76800 with immediate potential upside towards 81000-82000 kind of levels while the potential upside could take Sensex towards another ATH in next 2 months which could be around 86000-87000 kind of levels. This time the major potential upside could be triggered by FMCG followed by Reliance Industries in Oil & Gas space.
Meanwhile Bank Nifty the crucial support still remains at 49000-50000 remains crucial support levels which could if trigger & holds on the potential upside from here onwards could be 52700 – 53500 kind of levels. The broader range could be support by certain heavy weight in PSU heavy weight banks like PNB & SBI etc. & certain private banks like; HDFC Bank.
In Nifty Financial Services the crucial support now shifted lower within the defined range of 23000-23420 while potential upside from hereonwards could be towards 24500 kind of levels.
“Nifty IT” too here remained into a tight consolidation it seems like it’s all done with correction & consolidation. For the short term the crucial support in this sector remains 42700-43000 while if supports these levels we may later on get 46000 once again but the broader target of 53000 till March 2025 remains intact. The major move may once again be supported by heavy weights like TCS, Infosys & Wipro.
Till October 2024 the number of Demat Accounts has risen to whopping 20cr. this not only helps the capital markets directly but also directly to Equity investments.
The monthly SIP in Indian markets now rose at Rs. 25,000 cr. per month.
Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:
Nifty CMP: 24004.75
Nifty Immediate Target: 24300 / 24850-25200 / 26500-27000 (As the case may be)
Nifty Immediate Crucial Support: 23650-24000 / 23000-23200 (As the case may be)
Sensex CMP: 79223.11
Sensex Immediate Target: 81000-82000 / 86000-87000 (As the case may be)
Sensex Immediate Crucial Support: 76000-76800 / 77000-78000 (As the case may be)
Bank Nifty CMP: 50988.80
Bank Nifty Immediate Target: 52700-53500
Bank Nifty Immediate Crucial Support: 49000-50000
Nifty Financial CMP: 23735.70
Nifty Financial Crucial Target: 24500
Nifty Financial Crucial Support: 23000-23420
Nifty IT CMP: 43726.50
Nifty IT Potential Upside: 46000 / 53000
Nifty IT Crucial Supports: 42700-43000 / 40000-41500 (As the case may be)
Stock on Radar:
Large Caps:
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Britannia Industries (CMP 4834): This large cap FMCG counter looks like has formed a Bullish reversal pattern on Daily as well as Weekly charts. Looks good to accumulate here at CMP 4834 with strict SL placed at 4660 for a potential upside towards 5400 in 2 months time frame.
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Nestle India (CMP 2232): This counter has been on our radar from subdued levels of 2165 still looks positive for 2350 from CMP 2232 with strict SL placed at 2100.
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Samvardhana Motherson International (CMP 160): This large-cap auto counter looks good for a reversal from CMP 160 with strict SL placed at 150 one can expect a potential upside towards 190-200 in 3 months time frame.
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Reliance (CMP 1251): This large-cap counter has been on our radar since subdued levels of 1265 & from there it has already tested 1217. This counter again giving opportunity at CMP 1251 with broader markets looking bullish this heavy weight giant may continue to rise from here onwards at 1251 the potential upside form here on wards could be around 1600 in the next 3-6mths time frame.
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Adani Green (CMP 1046): This Adani group counter looks good to add here at CMP 1054 with strict SL placed at 870 for a possible target of 1500 in 3 months time frame.
Mid-Caps:
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CE Info Systems (Map My India)(CMP 1629): Map my India has been on corrective mode since 2748 levels & from there it has corrective nearly 40% in this market turmoil. Looks good to accumulate here at CMP 1626 with strict SL placed at 1480 for a expected potential upside towards 1900-2000 in no time.
Small & Micro- Caps:
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Gandhar Oil (CMP 219): This small cap counter looks like can show some potential upside towards 250-270 within 2 month time frame from CMP 219 with strict SL placed at 199.
About the Author:
Mr. Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 12+ years exploring in depth analysis of the Equity & Derivatives with accuracy of 90% and above.
He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.
Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
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