Strong global market cues are expected to drive the opening of the Indian stock market indices, the Sensex and Nifty 50, on a positive note on Wednesday.
The Indian benchmark index is off to a better start, according to Gift Nifty’s trends. Compared to the Nifty futures’ previous close of 21,499, the Gift Nifty was trading at about 21,545.
On December 26, the domestic frontline indices continued their upward trend, with the Nifty 50 breaking out of the previous trading range of 21,232–21,391.
The Nifty 50 closed 91.95 points, or 0.43%, higher at 21,441.35, while the Sensex gained 229.84 points to close at 71,336.80.
“However, the short-term trend remains downward.” Momentum readings like the 14-day RSI are also in decline mode (though they have recently bounced back) after falling sharply from overbought levels last Wednesday. “This calls for caution in the short term,” said Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities.
He believes the Nifty 50 needs to cross the recent highs of 21,593 to reverse the current downtrend.
Nifty Open Interest Data
On the call side, the highest Open Interest (OI) is observed at 22,000, followed by 21,500 strike prices, while on the put side, the highest OI is observed at 21,300 strike price, according to Deven Mehata, Equity Research Analyst at Choice Broking.
Predictions for the Nifty 50
After an initially positive start, the Nifty 50 traded mostly sideways on December 27.
“Optimism persists as the index remains above critical moving averages.” There could be significant immediate resistance at 21,500. A decisive break above this level could launch the index into a significant rally,” said Rupak De, Senior Technical Analyst at LKP Securities.
Until then, he expects the index to trade between 21,300 and 21,500.
Bank Nifty Forecast
On December 26, the Bank Nifty index rose 233 points to close at 47,725 points.
“Bank Nifty sentiment has returned to positive territory as the index rises above 47,500.” A small green candle within a previous red candle indicates the possibility of a bullish trend ahead. “Support is established at 47,500, while resistance is observed on the higher side at 48,000/48,250,” said De.
