The Indian stock market is gearing up for a positive start to the trading week, with benchmark indices likely to open higher on Monday, December 22. This optimistic outlook is fueled by a strong rally in global markets, particularly on Wall Street, where technology stocks led significant gains.
Global Momentum and Friday's Rally Set the Stage
Asian share markets traded higher on Monday, taking cues from the tech-driven surge in the US. This global positivity is directly reflected in the Gift Nifty, which was trading near the 26,170 level, marking a notable gain of 139 points or 0.54% from the previous close of Nifty futures. This indicator strongly suggests a gap-up opening for the domestic market.
This anticipated rise follows a powerful rebound session on Friday, December 19, where Indian markets snapped a four-day losing streak. The rally was supported by a stable rupee, positive global signals, and a policy decision from the Bank of Japan that met market expectations. The Sensex jumped 448 points (0.53%) to close at 84,929.36, while the Nifty 50 advanced 151 points (0.58%) to settle at 25,966.40.
Broader market indices outperformed the benchmarks, with the BSE Midcap and Smallcap indices climbing 1.26% and 1.25%, respectively. Investor wealth saw a sharp increase, as the total market capitalisation of BSE-listed firms soared by over ₹5 lakh crore in a single day, reaching above ₹471 lakh crore.
Analyst Views and Technical Roadmap for Nifty 50
Market experts believe the Nifty 50 is at a critical juncture, navigating key resistance levels. While the broader trend remains constructive, the immediate path may involve consolidation.
Hitesh Tailor of Choice Broking noted that the index continues to trade above its key moving averages (20-day, 50-day, and 200-day EMA), which supports a bullish undertone. He identified 26,000 as immediate resistance, followed by 26,200 and 26,400. On the support front, levels to watch are 25,900 and 25,800. Tailor cautioned that a break below 25,700 could trigger selling pressure, advising a buy-on-dips strategy with strict stop-losses.
Osho Krishan of Angel One pointed to an Inside Bar formation on the weekly chart, indicating limited momentum. He stated that a decisive move above the 26,050–26,100 zone is needed for bulls to regain control and aim for 26,300–26,325. Key support is placed in the 25,850–25,800 band, with a crucial base at 25,700.
Derivatives Data Signals Cautious Consolidation
The options data reveals a market bracing for range-bound trading. There is a heavy build-up of nearly 1.41 crore call contracts at the 26,000 strike, establishing it as a formidable resistance. Conversely, the accumulation of around 1.36 crore put contracts at the 25,900 strike provides a solid support base.
Dhupesh Dhameja of SAMCO Securities explained that call writers adding positions at current levels reinforce overhead resistance, while put writers moving to lower strikes suggest prolonged consolidation. The Put-Call Ratio (PCR) improved to 1.10 from 0.66, indicating a mild pickup in positive sentiment as buyers defend lower levels.
Bank Nifty at an Inflection Point
The banking index, Bank Nifty, is also showing signs of indecision, hinting at a period of consolidation before its next directional move.
Nilesh Jain of Centrum Broking observed that the index closed above 59,000 but remains below its immediate resistance at the 21-day DMA near 59,260. A decisive break above this level could open the path towards 60,000. On the downside, the 50-DMA around 58,470 acts as key support, with a broader trading range of 58,400–60,000 expected.
Vatsal Bhuva of LKP Securities highlighted the formation of a Doji candlestick on the weekly chart, underscoring market indecisiveness. He expects a few more sessions of consolidation, with the index likely to trade in a narrow range between 58,800 and 59,500. A breakout above 59,500 or a breakdown below 58,800 will determine the next significant move.
Disclaimer: The views and recommendations expressed are those of individual analysts and broking firms. Investors are advised to consult certified experts before making any investment decisions.
