With the United States Federal Reserve is expected to keep the monetary policy rates unchanged on December 13, though market participants are all ears for Fed chair Jerome Powell’s commentary for hints rate cut plans. The Street expects the US Fed’s FOMC to maintain a cautious stance and keep interest rates unchanged at the current target of 5.25-5.50 percent.
“Powell’s commentary is what people are keen to see. Earlier, the people were expecting the Fed to start reducing the rates from March itself; now, they are expecting it in May. If commentaries suggest a potential delay, it might be negative for tomorrow’s market. Otherwise, there is likely to be limited surprise from the Fed's announcement,” said Raj Deepak Singh, head of derivatives research at ICICI Securities.
Nifty cautious; watch these levels for support, trading range
"Profit-booking and weakness are seen in technology stocks today. Short-term support is 20,750-20,800, with 21,000 as a higher hurdle. Consolidation is likely and directional trade if levels are surpassed. A break below 20,750 or 208,00 might extend the downside towards the Budget Day’s low. Otherwise, a positive bias should continue," Singh said.
“Daily RSI has indicated a negative crossover within its overbought zone, and ADX is at 63, confirming the lack of strength that complements the ongoing unwinding,” said Sacchitanand Uttekar, vice-president for research and data analysis at Tradebulls Securities.
“The Nifty has fallen below 20,880 intraday after remaining above its 5-DEMA support level for 28 sessions. A 'hanging man' candlestick formation and a recent series of narrow-ranged bodies around the supply zone of 21,000–21,100 confirm the decline in the current momentum strength,” he said.
The options data suggests that 21,000 will continue to be a formidable barrier for the coming week, but a decline below the 20,700 PE OI cluster support would have significant negative ramifications for the index, Uttekar added.
A breather after a bull run
"The market is taking a breather, data remains positive. Some call writing at 21,000 and 21,100 signals a major supply zone. Until the Nifty breaks these levels, expect consolidation in the 20,750 to 21,000 range,” said Rajesh Palviya, head of technical and derivative research at Axis Securities.
“On the downside, put writers at 20,800-20,700 indicate base-building. Watch if this base holds post the FOMC meeting. Ahead of FOMC, the market positions for Nifty 20,700 to 20,800, a key area for support buying."
Reduce longs, lighten up positions
Uttekar advises to reduce longs and stay light on positions to re-enter at lower levels around 20,340 (Gap Support) as the outcome of the FOMC meeting is quickly approaching. At this point, aggressive shorts might also be taken into consideration, but leverage positions can be added after a confirmatory close below 20,710.
Bank Nifty outlook, support, resistance, trading range
"For Bank Nifty, the major support area that we can see in the last couple of trading sessions is taking place around 46,800 to 46,900. That's the area on Bank Nifty spot where most of the put writers are continuing writing their positions. So I think the major hit on the Bank Nifty will come below 46,800. Until 46,800 is not taken out, I think the market is still hoping ahead of the Fed meet that these levels may get again buying interest," said Palviya.
"On the higher side, the major supply zone for Bank Nifty is 47,200. So, major short-covering will take place above 47,200. So range-bound and consolidation are going to take place for the next sessions," he added.
After the US monetary policy outcome, both the indices may see a directional move, but at this moment the market is a little bullish and there is no such bearishness, Palviya said.
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