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Below the Quote on Weekly market outlook by Stoxkart, CEO, Pranay Aggarwal: Conflicting Perceptions Could Lead to a Sideways Market

In the last week, emotions ran high as the market moved sharply up on Monday and the gains were negated by a sharp fall on Thursday. The underlying news events were just as conflicting - optimism prevailed after the Maharashtra election results but the allegations about the Adani group raised concerns among investors.

On Friday, the excitement in the Pharma and Auto stocks helped the Nifty close up 0.91% at 24,131.10 while the S&P BSE Sensex settled 0.96% higher at 759.05 points. The market's apparent discounting of the anticipated slowdown in India's Q2 GDP to 6.5% suggests that traders are looking beyond short-term economic data and focusing on the longer-term growth prospects of the Indian economy.

We are starting the forthcoming week with conflicting events. The Maharashtra election results gave a clear mandate to the Mahayuti alliance, but it has shown uncertainty regarding the leadership pick of the Chief Minister. Adani stocks have mostly recovered from the rout in earlier week but a new concern emerged about the GDP slump. The GDP growth number has come down to 5.4%, compared to 8.1% in the corresponding quarter a year back.

The candlestick pattern suggests the nearest resistance level at 24,350-24,360 for the index. Many traders will likely be hesitant to buy above this level, remembering past failures to break through this resistance. A breakout above this level could trigger a wave of buying, fueled by the fear of missing out (FOMO). As long as the index remains below 24,360, short-term traders may book profits on any bounce and wait for a fresh breakout. Holding on to positions for too long, hoping for further gains, can be detrimental if the market reverses its course.

Global markets are grappling with anxieties stemming from geopolitical tensions and uncertainties surrounding the U.S. Fed's interest rate decisions. The possibility of changing global trade dynamics under President-elect Donald Trump, particularly due to the threat of U.S. tariffs, is further adding to the global market unease.

The Indian rupee, while ending Friday relatively flat at 84.4825, remains precariously close to its all-time low of 84.5075, reached just last week. In contrast to the anxieties impacting Asian markets and currencies, the U.S. dollar has experienced a surge, mirroring a similar upward trend in U.S. yields, ever since Donald Trump's election victory in early November.

Though Nifty has shown strength in the last week, the medium-term trend remains weak. From its September high of around 26,277, the Nifty is still down almost 12%. Novice traders often confuse short-term and long-term trends, potentially leading them to make impulsive decisions during these consolidations. It is crucial to remember that the market is designed to exploit such mistakes. Traders should focus on managing positions with a pre-determined strategy, rather than trying to predict every short-term fluctuation.