The market had a spectacular November, after a scary October. Nifty saw a rally from 10350 to 10870, amidst volatility. The market touched 10,900 giving hopes for a breakout above 11,000 but could not sustain the upward movement and it slid below 10,900. The rally was fueled by an improving rupee and a sharp fall in crude oil prices. A further relief to the market was RBI’s ease in norms for NBFC. These are comfortable signs for a positive future. Fed’s assurance to avoid any hawkish stance on interest rates is a cherry on top. The FIIs turned a net buyer, reversing the trends from the previous month and it is a big relief to the retail investors in India. On weekly charts, Nifty had formed bullish candle, signaling the bull’s grip of D street. However, the Indian economy saw a dip in GDP growth rate in Q2, FY19. The economy took a sharp hit and came down to 7.2% from 8.2%. Along with that, the news that the government is likely to miss its Fiscal Deficit target set at 3.2% is not good for retail investors either. Based on this, this report analyses the possible market trend in December. The nifty dipped after touching 10,900 and it is bound to act as a first resistance level. A break below 10,625 will turn the market from bullish to bearish. Along with that, 11th December is the crucial date, which every investor and trader should look out for carefully. An ensured victory for the ruling party may lead into a breakout, while anything short of that may again result in a sharp fall. This was witnessed in the may elections as well. Including all these factors at hand, experts suggest that the market could consolidate in the opening days of the week, while closing days and BankNifty expiry will decide the further direction of the market.
The driving factors for the first week of December are PMI index, Auto sales numbers to be disclosed on Dec 7, foreign exchange numbers and performance of rupee. The sectors which are likely to remain volatile are Metal, Finance, and Auto sector. Any sharp change in crude price, after the OPEC meeting, will become the pivot, around which the market will swing. Amidst the volatility, retail investors are advised to remain cautious and trade with strict stop loss. Long-term investor can go for bottom fishing, only if the recent correction has nothing to do with fundamentals.