Hello Folks welcome to weekly stock market wrap and belated Merry Christmas! Hope you have enjoyed this week. If I start with the Indian markets, the markets were swinging throughout the week within a small range. Experts were saying that the FIIs have gone on vacation or are going for it and their activities will see slowdown this week, but can someone tell me which FII was selling Rupees 2 to 3 thousand Crore daily? Even now, when I am writing this blog, the FIIs data is showing selling of Rs 1323 Crore on the last trading day of the week. This is the reason I don’t trust experts’ commentary much and I also tell my readers that believing in the price and action of markets is a better strategy and it is a leading indicator which predicts the future action probabilities of the market or any underlying in a better way. So without wasting time let’s start the story of this week’s Indian and world market and probable prediction of next week along with trade probabilities in Gold, Silver, Nifty, BankNifty, Bitcoin and Long Short Stock Trade ideas.
Table of Contents
US Markets
Dowjones, the main index of US markets, traded with gains this week. Taking support from the lower-band of its uptrend channel, the Dowjones closed with a gain of 151 points and .35 percent this week. While it does not show any great and decisive strength, it certainly shows resilience near its support.
The reason for the weakness in the US markets is still seen as the increase in the US 10 years bond yield, which is driven by several economic reasons and federal bank policies. US Bond yield is at its recent peak of 4.62 as I write this article and this is a matter of concern from the perspective of stock market liquidity.
Nasdaq and S&P500 also showed some strength this week and are close to their lifetime highs. There are two things that can bring back the momentum of US markets; first is the coming down of US Bond yield and my second speculation is that market activities may remain low due to Christmas and New Year vacations and we may see some decisive moves and developments after the coming week when market participation will be increased.
If you look at the entire worldwide markets, it appears that they do not want to fall and at the moment they are not seeing any reason for rising. The European and Asian markets are also showing something similar. And such a situation definitely gives an indication and that is that there is an invisible strength in the markets. The support levels of Dowjones which are visible on the chart are 42417, 40605, 40013. There are chances of a halt at the levels of 43393 and 44962. I will keep the sentiments on the positive side for now.
India Market
Nifty Outlook and Trade Probability
After a major fall last week, the Nifty index showed some resilience this week and closed with a gain of .96 percent. A downward trend has initiated on the daily charts, which is a matter of concern for the bulls. Nifty is down -9.28 percent from its recent top.
For those who trade Nifty, my suggestion for positional trades is to remain neutral for now, as being oversold may lead to short covering and a larger downside trend will keep the downside pressure intact. Hence, carrying overnight positions can be a little risky. Intraday trades can prove to be a better strategy in this type of markets. The respective support and resistance levels are as follows:
Support – 23647, 23419, 23263
Resistance – 23938, 24302, 24537
Bank Nifty Outlook and Trade Probability
Bank Nifty was also seen trading in the same direction as Nifty this week. Bank Nifty closed with a gain of 552 points and 1.09 percent. If you carefully look at the weekly chart of Bank Nifty given below, the difference that can be seen between Nifty and Bank Nifty is of trend. On one hand, while a downside trend is being initiated on the Nifty daily chart; other hand the weekly uptrend on Bank Nifty is still protected. And because of this difference, the positional trade sentiment is of the long side on Bank Nifty which can be initiated with a strict stop-loss near the support levels. Respective support and resistance levels are as follows:
Support – 50951, 50178, 49787
Resistance – 51550, 51740, 52055
Stock of the week (Long/Short)
Long Side Trade
This week ICICIBANK is coming in our setup where we will initiate the LONG side trade. Levels and Chart image is from the cash levels and it needs to be converted into the future levels if the position is being made in FnO.
Buy at the CMP /1307.00, Stop Loss at 1291.00, Target at 1346.00 with a Risk Reward Ratio of 1:2.45
Short Side Trade
This week we haven’t got any Short Side Stock Trade idea into our setup and as we always say when your setup is not giving you trade better you stay away from taking trade. Because not taking trade is also equivalent to take trade in the trading business.
Alternative Investments / Trades
Gold Outlook and Trade Probability
In the world markets, Gold saw a fall of .94 percent or $24.950 this week. We had predicted last week that as a downward trend line appeared on the charts, pressure would remain on gold and that is what happened. For the coming week too, short side trades should be taken on gold until gold decisively closes above $2672.44 on the daily charts. The long term trend is still bullish, so those who have investing positions should maintain it. If gold comes down due to some reasons, then it should accumulate in the staggered pattern till $2560 and $2414. Support levels for gold for the coming week will be – $2560, $2414 and resistance levels will be $2672, $2754, $2821.
Silver Outlook and Trade Probability
The evening star pattern visible on the charts is still putting pressure on silver. This happens when a strong price and action pattern is formed at the right place. Silver witnessed a fall of .45 percent this week. Silver is seen struggling between 20 and 50 week exponential moving averages on the charts. A steep downward trend is visible on the weekly chart which is difficult tobe maintained for the long term due to its steep formation.
The trade strategy for silver for the coming week should remain on the short side till silver gives a decisive closing above $29.97 on the daily charts. Before that, whenever silver comes near the resistance levels, one should think about shorting it with a strict stop loss. A long side sentiment will be formed in silver only when it gives a close above $30.78 on the daily charts once again.
The support levels for silver for the coming week will be $28.85, $27.90 and resistance levels will be $29.97, $30.78, $33.79
Crude Oil (WTI) Outlook and Trade Probability
The crude oil traded between the range shown on the chart this week. Crude oil closed with a gain of .98 percent. The weekly exponential averages and the downtrend together are pushing crude oil downward. The short-side trade bias on crude oil should continue. The sentiment will reverse only if crude oil closes above $74.96 on the daily chart. Or else small trades should be taken on the long side only when crude comes near $66.47 as this level has been protecting it since the last 2-3 months.
Coming week support for crude oil will be $66.47, 66.00 and resistances are likely to come at $71.27, $74.31, $74.96.
Bitcoin Outlook and Trade Probability
Bitcoin’s uptrend remains intact. However, it registered a fall of -.85 percent last week. And while we are writing this article, it is struggling to protect the support level of $94454 given last week. If Bitcoin decisively breaches this level, then the probability of it going down up to $81269 will increase.
My suggestion for long term investors is to initiate staggered buying at this level and then if the levels of $81269, $71513 are seen, then buying should initiate on those levels too for the long the term investing purpose.
Traders should be ready to take trades on both sides with a strict stop loss at the current levels as this level could show Bitcoin moving in both directions as it did in the past week. You as a trader would need to take trades with a strict stop loss keeping in mind your money management, risk reward ratio. Bitcoin trade sentiment for the coming week will remain on the neutral side where there will be opportunities to take trades on both sides.
In the coming week support for Bitcoin will be $81269, $71513 and resistances are likely to come at $104,454.
Conclusion and disclaimer
The content on MarkShala.com is intended for educational and informational purposes only. We specialize in writing blogs on financial planning, investment strategies, economic trends, and related topics. While we strive to provide accurate and reliable information, the content should not be taken as professional financial, investment, or legal advice.
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