“Today, we’ll delve into a technical analysis of the NIFTY index, examining its recent volatility and assessing the potential impact of global market dynamics.”

https://ganninsides.com/2024/12/28/nifty-sp-range-bound-and-vulnerable-to-downside/

NIFTY had an eventful week, during which the index broke below its December 20th low of 23,537 but held its November low of 23,263. Subsequently, holding that low, the index staged a recovery towards its resistance zone of 24,000 to 24,200 on Thursday.”

Interestingly, on December 5th, we also had a similar up day, which coincidentally was also the first Thursday of the month. Similarly, January 2nd was also the first Thursday of the month. So, let’s see how the next few sessions pan out for our markets.”

For next week, support for NIFTY would stand at 23,900 to 23,740 on spot. Consolidation is likely holding this support band. But once broken, the decline should resume towards 23,510 and probably towards the November low of 23,263.”

Technically, the index is still not out of the woods even in the extreme short term. As long as spot holds below 24,200 to 24,300 on a closing basis, the immediate trend would continue to stay absolutely bearish. But in case this zone is taken away, then the short-term setup would turn neutral.”

On the time front, there are no cycle dates until January 24th, so we are unlikely to get any sort of reference on the time front until January 24th. So, in this case, global markets become excessively important for our markets. And on that front too, according to our analysis, from next week, we are anticipating a decline to enter its next phase, especially on U.S. indices.”

US Market Update: S&P 500 Support at Risk

“For S&P, as I discussed last week, January 2nd was an important cycle date. On that day, we got a fresh marginal lower low below its December low. But despite that, the support of 5840 actually held on a closing basis. However, with every passing day, that support is getting weaker. I’m expecting it to finally go through as early as next week. The next cycle date is due on January 16th and 17th, so a lot can happen before that. Certain stocks such as Microsoft and Nvidia are gearing up for a scary decline. Let’s see.”

“The S&P 500 is teetering on the edge. The 5840 support level is under serious threat, and a break could trigger a sharper decline.  The weakness in leading stocks like Microsoft and Nvidia adds to the growing sense of unease. The next two weeks will be crucial in determining the near-term direction of the market. Proceed with caution.”

Nifty: Confined within a range, poised for a potential breakout, with a downside bias.

“NIFTY spent the entire past week inside the intraday range of 20th December. So, obviously, a break either side of the 20th December high or low is likely to produce a very powerful move on that side. I personally would be more interested in a move on the downside. But that does not matter as traders; we always require market confirmations to validate our expectations.”

Nifty Faces Strong Resistance: Downside Risks Remain

“For NIFTY, major resistance on the upside stands at 24,000 to 24,200 on spot. As long as the index stays below this zone, it should only be a matter of time before it breaks its December 20th low of 23,537 and subsequently breaks its November low of 23,263 in the next few days. On the time front, specifically for NIFTY, there is no dedicated major cycle date due until mid-January. This is the most dangerous thing for investors who are hoping for a respite from the selloff.”

S&P: Testing resistance, showing signs of weakness, and potentially vulnerable to a significant correction.

https://ganninsides.com/2024/12/19/time-cycles-and-market-turmoil-sp-500-and-nvidia/

“On S&P, as I discussed on December 19th, we likely have a durable top in place at 6100. In the past week, the index went very close towards that high but reversed back very sharply on Friday. Still, the index is yet to convincingly break the critical support of 5840, as I discussed earlier. Once that breaks, markets should be in for a waterfall decline towards 5620. The open gap of election results day is providing good support to the index. Once that gap fills, our projected higher degree correction would officially get confirmed. Anticipating this to get through post-critical time cycle dates of January 2nd, let’s see.”