Week Ending 15th December 2023

Dear patrons; it has been a stupendous week for the markets. The Nifty scaled new highs everyday shattering record after record, So vicious has been the charge by the Bulls that Bears are nowhere to be found, paving way for an astonishing rise of around 500 points in a week.

The rally on the bourses was effected by a strong in flow of good news on economic front. Firstly the central bank, RBI held status quo in interest rates and revised the GDP growth upwards. We are likely at the peak of the interest rate cycle and the market expects rates to come down in near future, leading to even further rise in the GDP growth. CPI & IIP data was also released during the week. CPI, although above RBI's comfort level, is still manageable and likely to cool off with Kharif crop. IIP data was great booster for the market. At the peak of interest rates IIP has been keeping a fast pace upwards. In case interest rates do come down in near future it will lead to further rise in industrial production providing further impetus to rise in the equity markets.

Globally, the Federal Reserve in the US also kept rates unchanged and was dovish in its commentary for the future rate cycle. US markets also expect rates to come down in near future providing impetus to growth in the World's largest economy. If rates in the US do come down as expected, it should lead to more fund flows to emerging markets like India.

Let's have a look at what happened on the charts last week

Nifty, as is evident from the above figure is at an all time high and in no resistance zone. Every dip in the Nifty is being bought into. As we had stated in the last blog Nifty still remains "Buy-On-Dips". Nifty remains in a very strong up trend and is likely to inch forward. Support for Nifty is around 21000 and resistance around 21500-21600. Up trend in Nifty remains intact till the time it closes below 20500. 

BankNifty, which was the leader in the last run lagged behind in the first part of this up trend but more than made up for the laggardness in the last couple of weeks to post closing above 48000 level. BankNifty has also entered an uncharted territory and is in no resistance zone. Support for BankNifty is placed around 47100-47000. and it may face resistance around 48500-48600.

All in all first fortnight of December has been a dream come true rally for the Bulls and investors have become richer every passing day. We expect many such moves in coming years and we should see Nifty becoming a 6 digit index in a decade or so.

Till such time keep accumulating good quality stocks.

Happy Investing!!!

"Trend in the market remains unchanged until and unless clear reversal signals occur" ~ Charles Dow (Dow Theory)

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.