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Market Overview

After two consecutive months of gains, the month of December witnessed profit taking and ended in the red. The start was positive and as the month progressed the benchmark touched new highs on the back of easing macro concerns like inflation and interest rates along with recovery in demand and easing supply side issues as compared to last year. However, in the second half, the markets witnessed profit booking and ended with losses. Thus, Sensex and Nifty closed down by 3.6% and 3.5% respectively.

Market Outlook

As we head into 2023, we expect markets to remain volatile as concerns with regards to inflation and rising input cost to subside gradually. Further, investors' focus will shift back on the upcoming earnings season and management commentary on demand, growth and cost would hold importance. In addition, the participants will keep a close watch on the announcement in the upcoming union budget as that would decide the action for next year. Amid all, it would be advisable to remain stock specific and therefore, we have identified 5 stocks which are fundamentally & technically strong as our New Year Picks for 2023.

Technical Outlook for Nifty 

* Nifty plunged sharply lower and lost nearly three and a half percent in a volatile month, tracking weak global cues. It remained under pressure for most of the month however marginal rebound in the final sessions trimmed some losses and it finally settled at 18105.30.

* Almost all the sectoral indices witnessed a fall in line with the benchmark index and ended lower. We had a similar situation on the broader front, which further added to the participants’ worries.

* Technically, the prevailing consolidation phase would continue until Nifty decisively reclaims 18,500 levels.  On the downside, 17800 levels would continue to act as critical support and its breakdown could fuel the negative bias. We recommend continuing with stock-specific trading approach during this phase and focusing more on risk management.

Outlook for Nifty 50 (18232.55)*Support 18,000/17,800/ 17,450 Resistance 18,350/18,500/18,850

Bank Nifty

* Bank Nifty managed to hold strong amid volatility and finally settled with a cut of over half a percent to close at the 42986.45 level.

* Among the banking pack, PSU banking counters were in the limelight while the private banking majors witnessed a mixed trend.

* The banking index looks comparatively stronger and we believe the 41000-41500 zone would act as a strong support zone in case of profit taking. While the PSU pack has an upper hand at present, we reiterate our preference for the private banking names and suggest utilizing the prevailing phase to accumulate gradually.

Outlook for Bank Nifty (43425.25)* Support 42,600/41,600/41,000  Resistance 43,650/44,300/44,850

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