December 2023 marked a significant milestone for the Indian market, as it turned out to be the best December in terms of gains since 2003. Unlike the surge of over 16 percent seen in 2003, this time, the month ended with a gain of approximately 8 percent. The year as a whole proved to be exceptional for the domestic market, despite various geopolitical challenges.
The benchmark indices experienced a remarkable growth of around 20 percent throughout the year, making it the eighth straight year of positive performance. During this period, the Nifty index reached a significant milestone of 21,800. In the final week of October 2023, we confidently predicted a bottom when the Nifty index was approaching the 19,000 mark. This prediction was based on the long-short ratio of FII index futures, which had reached nearly 10 percent. Since then, the index has rallied by approximately 3,000 points without any significant dips.
There are no signs of exhaustion on the price chart or momentum oscillators, except for a negative divergence in the daily RSI (relative strength index). However, the long-short ratio of FII's index future is now hovering around 70 percent. In the past 2-3 years, whenever this ratio has reached the range of 70-75 percent, we have observed a temporary top in the markets. This suggests that there may still be some room for further upside in the Nifty, but it could potentially be the final phase of the rally, followed by heavy profit-booking.
In terms of levels, the next psychological hurdle for the Nifty could be at 22,000, followed by 22,400. These levels could indicate the beginning of a corrective move. Traders are advised to maintain a cautious approach with regards to long positions.
For individual stock opportunities, it is crucial to adhere to strict stop losses, especially for small and midcap stocks. On the downside, immediate support is expected at 21,400, while 21,000 is considered a crucial support level.
Despite the Nifty Bank index's impressive performance in December 2023, surpassing the benchmark indices with a surge of over 8.5 percent, the overall performance of the index in the year 2023 was not as remarkable. Throughout the year, the index only gained over 12 percent, suggesting a significant underperformance.
However, there is currently a new breakout in the index, indicating the potential for further growth towards the milestone of 50,000. It is important to note that the index's support level is now at 47,500, and if it closes below this level, it may impede any further upward movement in the index.
Here are three buy calls for next 2-3 weeks:
Wipro: Buy | LTP: Rs 471.30 | Stop-Loss: Rs 440 | Target: Rs 530 | Return: 12.5 percent
Wipro has made a solid base near Rs 400–420 levels. Interestingly, time retracement is 0.886 approximately, along with price retracement of 0.618 percent approximately on the monthly time frame.
Additionally, it is sustaining above all major exponential moving averages. Moreover, monthly stochastics has reversed from 50 levels, which is looking lucrative. Thus, we advise traders to go long in the stock in the range of Rs 465–475 with a stop-loss of Rs 440 for the upside target of Rs 530.
Note: refer to the chart for details on time and price retracement calculation
Crompton Greaves Consumer Electricals: Buy | LTP: Rs 310.90 | Stop-Loss: Rs 285 | Target: Rs 355 | Return: 14 percent
For the past week or so, the counter has gained momentum. From a retracement perspective, alternate wave retracement comes exactly near 0.618 and 1.628 of its previous up moves, thus making it a lucrative buy. Having said that, time and price retracement are falling at the same length, which is a strong indication of bottoming out. (Time retracement is 0.886 and price retracement is 0.786 percent).
On the indicator front, the weekly RSI (relative strength index) has reversed from 50 levels, which further confirms our bullish stance on the counter. Thus, one can buy in the zone of Rs 305–312 for a target of Rs 355 and a stop-loss of Rs 285 on a daily closing basis.
Note: refer to the chart for details on time and price retracement calculation
Clean Science and Technology: Buy | LTP: Rs 1,549.1 | Stop-Loss: Rs 1,450 | Target: Rs 1,700 | Return: 10 percent
Clean had been consolidating between Rs 1,330 and Rs 1,430. Recently, it broke out from said levels and sustained above them. Also, the bear trendline on a weekly scale has been violated, along with stochastic has given bull divergence, which is looking lucrative.
Thus, we advised traders to go long in the zone of Rs 1,525-1,550 with a stop loss of Rs 1,450 and an upside target of Rs 1,700.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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