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Below the Quote on Technical outlook for the week starting December 2 by Lovelesh Sharma, Consultant, SAS Online - a deep discount broker

It’s the day where we get to analyse Monthly, Weekly and the daily chart altogether as Nifty heads to December which is yet again one of the best performing months based on average monthly performance. Let’s start with importantly the monthly Chart.

On the monthly chart, Nifty 50 has ended down for second month but more importantly formed a Hammer pattern. A hammer candlestick pattern is a single candlestick pattern that suggests a potential reversal of the overall bullish trend. A hammer is produced when a candle has a very short or no body and leaves a long, weak one on its lower side. This coincides with the reversal from our support trendline drawn from lows of March 2023. Hence a bottom formation can be in progress as long as we sustain 23600 – 23700.

On the weekly scale, Nifty has formed a Bullish Harami Pattern which as well is a two – candle reversal pattern. It implies the selling pressure is declining and the buyers are slowly taking control over the market. We also see the important of lower levels within this month as Nifty touched the 50

MA on weekly scale at 23366 last week and managed to gap up, trade and close above previous week’s range.

On the Daily scale, we have seen improvement in breadth as Nifty sustains the 200 days MA at 23651. The percent of stocks above very short term 10 MA inched up to 74% while the % above 20 ma is at 60.51. The worrying aspect is % of stocks above 50 MA is still at only 42%.

The RSI is in no momentum zone of 60 – 40 While the ADX declining, +DI and -DI as well declining on rolling basis for past two days indicating we are in a zone of consolidation.

To summarize, this is the deciding week we have up ahead, Seasonality based best month is December, a Strong bottom formation which is formed at 50 MA on weekly Scale, 200 MA on daily scale and rebound in breadth. A close above 24350 will push Nifty to new ATH in coming month s while in short term to zone of 24500 – 24800 while if we do not sustain the 23850, we are still in process of consolidation and range may remain the same for coming week. Though, confluence of levels tells us that we should remain a Buyer in this market on any dips to supports mentioned above.

The Catalyst for the trend can be the MPC meet in First week of December.

Nifty is bounded between 24000 – 24500 with short built up at 24000 while on higher side 24500. We expect a range bound movement in Nifty between this range for coming expiry.

BankNifty on the other hand indicates a range of 51500 – 52500 and only a close above 52500 can further push for trend movement towards 53000. Since it is bounded by an inverse triangle pattern from last couple of weeks, it is important to breach 52500. The short built up at 52500 will continue to act as resistance while it is important to watch MPC meets in coming week which can trigger volatility in underlying price action. The same price zone if also depicted in the OI built up with 51500 – to 52500 being a short term range to play.

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