Market Outlook

UPCOMING WEEK: STOCK MARKET OUTLOOK

U.S. equities closed lower on Friday, with the Dow Jones Industrial Average dropping 1.66% to reach a one-month low. The S&P 500 declined by 1.55%, while the Nasdaq Composite shed 1.64%. Meanwhile, the U.S. Dollar Index Futures rose 0.44% to 109.48.

Indian blue-chip indices ended lower on Friday, capping a week of losses amid concerns over corporate earnings. However, IT stocks showed strength following optimistic demand revival signals from sector leader TCS. The India VIX edged up by 1.36%, closing at 14.85.

The Nifty 50 dropped 0.4% to close at 23,431.5 points, while the BSE Sensex slipped 0.31% to settle at 77,378.91.

India's industrial output, as reflected in the Index of Industrial Production (IIP), climbed 5.2% in November 2024, reaching a six-month high and improving from 3.5% in October. This growth was driven by a 5.8% rise in manufacturing output, a 1.9% increase in mining production, and a 4.4% uptick in power generation.

On the economic indicators front, the industrial sector's performance signals a rebound in economic activity, supported by higher manufacturing demand and stable power consumption. However, for the April-November period, industrial output grew by 4.1%, moderating from 6.5% in the same period last year, reflecting challenges in sustaining momentum amidst global economic uncertainties.

On Friday, foreign portfolio investors (FPIs) sold ?2254.68 crores worth of equities, while domestic institutional investors (DIIs) bought ?3961.92 crores in Indian stocks.

From a technical standpoint, the Nifty closed marginally below its 50-week Exponential Moving Average (WEMA), positioned at 23,442. Since April 2023, the Nifty has respected the 50 WEMA on three occasions. However, if it fails to hold above this level, the selling pressure is likely to intensify, potentially dragging the index down to the key support levels of 23,263, 23,000, and 22,800.

However, if the Nifty manages to hold above the 50 WEMA and surpass the 23,550 level, a recovery toward 23,800 is possible. Along the way, the levels of 23,658, 23,743, and 23,813 are expected to act as intermediate resistance points.

Bank Nifty has decisively breached its 50-week Exponential Moving Average (WEMA) with a significant red candle, signalling continued selling pressure as long as it trades below the 49,300 level. A further decline toward 48,300–48,000 is likely. However, if Bank Nifty manages to reclaim and sustain above 49,300, a recovery toward 49,900–50,300 could be on the cards.

Last Week's Indices Performance

FII DII Activity

Last week, Foreign Institutional Investors (FIIs)sold equities totalling ?-16854.25 crores, while Domestic Institutional Investors (DIIs) were bought equities worth ?+21682.76 crores. Month till time FII were seller? to ?-21357.46 crores & DII were Net Buyer to ?+24215.87 crores.

DERIVATIVE & TECHNICAL ANALYSIS

NIFTY 50 OUTLOOK?

OI Concentration Jan 16 Expiry

Highest CE – 23800 CE ( in lots): 86.87 K ?????????????????????? 24000 CE ( in lots) – 1.14 ?Lakhs

Highest PE – 23000 PE (in lots) : 61.19 K???????????????????????? 24000 PE ( in lots) – 50.71 K

PCR ?jan 16 – 0.73 (Near Oversold )

Max Pain Nov Dec 05 – 23550

Technical Outlook

The Nifty closed slightly below its 50-week Exponential Moving Average (WEMA) at 23,442. If it fails to hold above this level, selling pressure could push it toward support levels at 23,263, 23,000, and 22,800. However, if it manages to stay above the 50 WEMA and surpass 23,550, a recovery toward 23,800 is possible, with resistance at 23,658, 23,743, and 23,813.

BANK NIFTY OUTLOOK

Bank Nifty Jan 30 2025 ?Expiry

OI Concentration Jan 30 ?

Highest – 52000 CE ( in lots) ?: 1.17 L? ??????????????????????????? ?????????????? 52000 CE (in lots) –1.34 ?Lacs

Highest PE – 49000 PE ( in lots) : 87.42 k ?,? ?????????????????? 48000 PE – 76.42 K ?

PCR Jan 30 ?Expiry – 0.55 ( Oversold )

Max Pain Jan 30 – 50000

Technical Outlook

Bank Nifty has broken its 50-week Exponential Moving Average (WEMA) with a sharp red candle, indicating continued selling pressure below 49,300. A drop to 48,300 – 48,000 is possible. However, if it recovers above 49,300, a move toward 49,900–50,300 could follow.

PRIMARY MARKET ACTIVITY

?Upcoming IPO

Laxmi Dental Ltd.

Issue Date: January 13 – January 15, 2025?

Issue Size: Rs. 670.58 Cr - Rs. 705.18 Cr.

Price Band: Rs. 407 to Rs. 428

Lot Size: 33 Shares33 Shares

STOCK RECOMMENDATION?

SWING BUY TATACON TGT 1013-1030 sl 950 cmp 972

Rationale: ?

1. Closed above 50 Wema

2. RSI shown positive divergence

Research Disclaimer

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Analyst Disclosure: ?

Stock has been recommended to Arihant Capital Markets Ltd. clients and they may have position in it.