Week Ahead

The BSE Sensex rallied 1,090.21 points or 1.89 percent to 58,786.67, and the Nifty50 jumped 314.60 points or 1.83 percent to 17,511.30, backed by rate sensitive, infra, FMCG and metals stocks.

The broader markets also joined the bulls' party with the BSE Midcap and Smallcap indices rising 2 percent and 3 percent respectively.

The coming week is going to be critical for the markets as we have some important data and events are lined up. Importantly, we have the US Fed meet scheduled and they will announce the outcome on December 15. Apart from these data, the updates on the global COVID situation will remain on participants' radar.

The market will closely watch the mood of FIIs who are consistent sellers since November 16, though DIIs have been trying to support the market with their inflow.

In the week gone by, foreign institutional investors have net sold more than Rs 9,200 crore worth of shares when Domestic institutional investors net bought over Rs 7,200 crore worth of shares.. FIIs were net sellers to the tune of Rs 16,235 crore in the current month, continuing selling for the third straight month, however, DIIs made Rs 13,700 crore of net buying in December, continuing purchases for the 10th consecutive month.

Technically Nifty50 saw bullish candle formation on the daily as well as weekly charts. The index twice managed to hold 16,900 mark in recent correction, and also get back above 17,000 mark in the following session. In the last two straight sessions, it firmly held above 17,500 mark. All this indicates positive market sentiment and if the index manages to hold the same levels then there could be further rally towards 17,900 in coming sessions.

Nifty slipped below the 16,900 level two times but managed to close above this level, and it created a kind of double bottom formation around that level, however, 17,500-17,615 is a critical resistance zone. Above this, we can expect a move towards the next important resistance zone of 17,750-17,950.

On the downside, .17,300-17,250 will act as an immediate and strong support zone at any pullback while a move below this, may lead to selling pressure towards the 17,000-16,900 zone.