Relief rally set to continue amid positive global clues, 5 things to know before you open the bell

The rally is expected to continue in the last trading session of the week amid positive global indices. SGX Nifty was up in the green, hinting at a positive start for Indian stocks.

The Dalal Street bulls appear to have entered a holiday mood as benchmarks extended their gains on Thursday. S&P BSE Sensex gained 384 points or 0.68% to close at 57,315 while NSE Nifty 50 rose 117 points or 0.69% to settle at 17,072 yesterday. The rally is expected to continue in the last trading session of the week amid positive global indices. SGX Nifty was up in the green, hinting at a positive start for Indian stocks. The rally of relief could continue for a bit. FII sales have fallen sharply over the past few days as they get into the holiday mood. However, volatility cannot be ruled out due to the potential risk of the Omicron variant and fragile global indices, said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services Ltd.

Global indices

All three of Wall Street’s major indices posted solid gains for a third straight session on Thursday, with the S&P 500 marking a record close. Stocks ended the shortened holiday week on a positive note, increasing sentiment as Christmas and New Years approached. Gains were strong among S&P 500 sectors, led by Consumer Discretionary and Industrials, both of which rose about 1.2%. The Dow Jones Industrial Average rose 196.67 points, or 0.55%, to 35,950.56, the S&P 500 gained 29.23 points, or 0.62%, to 4,725.79 while the Nasdaq Composite increased 131.48 points, or 0.85%, to 15,653.37.

European stocks rose Thursday as global markets rallied after two research studies indicated Omicron was less severe than the Delta coronavirus variant, increasing investor sentiment. London’s blue-chip FTSE 100 index gained 0.43%, extending its two-day rally, while the pan-European STOXX 600 index jumped 1%. Asian markets were trading higher today, with Chinese and Hong Kong stocks posting gains. The Shanghai Composite is up 0.40% while the Hang Seng is up 0.07%. Japan’s Nikkei 225 and South Korea’s KOSPI and KOSDAQ were also up in the green on Friday.

Key resistance, support levels for Nifty

Nifty could rise again due to global indices, but there is a good chance that we will see follow-up buying at a higher level. 17 150-17 200 should serve as a resistance zone and the risk reward remains good in this zone for shorts. Support is placed at 17,020 and 16,970, said Rahul Sharma, director and head of research, JM Financial Services Ltd.

Technical view

The bullish momentum continued in the market for the third straight session on Thursday and Nifty closed the day 117 points higher amid a range move. After opening with a bullish spread of 111 points, the market attempted to rally early in the session. It then moved into a narrow intraday range move for the remaining part and eventually closed near the highs. The bullish gap that opens is not closed. A small positive candle has formed on the daily chart with a minor upper and lower shadow. Technically, this pattern indicates a doji or spinning top candle pattern formation at the highest. Normally, the formation of such patterns after a reasonable rise or at a significant hurdle could act as a reversal pattern after confirmation, said Nagaraj Shetti, technical research analyst, HDFC Securities.

Nifty is currently placed at the crucial obstacle of the 17150-17200 levels (ascending trendline according to the concept of polarity shift). The negative graphic pattern of the lower peaks and lower troughs remains intact and Nifty is now placed to form a new lower peak in the sequence. Confirmation of weakness was needed to call it a lower peak reversal. A formation of three openings back to back gaps is observed in the last three sessions, not filled or partially filled. Most often, the trend is reversed, and the gaps are filled soon after the formation of the third gap. Therefore, bulls need to be careful at higher levels. Nifty’s short term trend continues to be positive. But, the market is currently positioned at crucial air resistance around the 17100-17200 levels. The overall pattern of the chart indicates a greater possibility of selling emerging from near the resistance band over the next 1-2 sessions, he added.

Stocks under F&O ban on NSE

Escorts, Indiabulls Housing Finance, Vodafone Idea and Zee Entertainment Enterprises are the stocks under F&O ban for Friday, December 24. Securities subject to the blackout period in the M&O segment include companies in which the security has exceeded 95% of the market-wide position limit.

IPO watch

Data Patterns Listing: Data Patterns stocks will debut today. The company’s Rs 588 crore IPO was heavily oversubscribed earlier this month. The public issue was subscribed for a total of 119.62 times led by Non Institutional Investors (NII) who subscribed their share 254 times the quota. Qualified Institutional Buyers (QIBs) made offers 191 times, while the retail portion was taken 23 times. Data Patterns shares were offered to investors in a fixed price range of Rs 555 to 585 per share, in a batch of 25 shares.

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