Nifty 50, Sensex Today: What to Expect on December 5 as Markets Eye RBI Policy Announcement

The possible commencement of trading on the Indian stock markets in the early hours of Friday shall have a somber note to it felt majorly by investors waiting eagerly for a new announcement. In this odd situation, early trades are expected to be neutral as the global mood deviates and as the government takes corrective measures.

Nifty futures were trading around 26,181, a discount of near 5 points or so compared to the previous close of the ramp as shiver ancestors whispered into the ears of Dalal Street about a slow start to trading.

The RBI is widely predicted to keep the repo rate at 5.50%, with participants receptive to signals from the central bank for examining further policy moves on inflation, liquidity, and the future of interest rates.

The Indian bourses, after shedding the gains seen over the last four sessions, were pulled up by a late-session rally, with the Sensex adding 158.51 points (0.19%) to close at 43,265.32 and Nifty 50 climbing 47.75 points (0.18%) to close at 26,033.75, forming a small bodied bullish candle long on the daily chart.

Sensex Today: Levels to Watch

On the completion of the policy bow, the market is likely to be braced for volatility.

• The Sensex's current ability to hold above 85,000 shows a strong sentiment. According to sensex support: 85,000 and 84,800: resistance: 65 ); 85,500 - 85,650; Once the 15,650 level is taken out, the next target on the upside would be 86,000 -86,200. Below 84,800 levels, the Sensex could retest 84,500-84,400.
• Nifty poses a narrow-range possibility with the heavy OI at 26,000 levels
• Amruta Shinde of Choice Equity Broking mentions aggressive call writing seen at the 26,100 strike, and strong put OI at 26,000, indicating a slight trading range still persisting.
• On the upside, if Nifty sustains above 26,300, the first step of recovery would be to cover 26,310-26,400.
• The Nifty 50 formed a bullish candle on Friday after registering four straight sessions of loss trading, but the current price action has been below its 5-and 10-day EMAs.

Vinay Rajani, Technical Research Analyst at HDFC Securities, shares crucial levels:

Supports: 25,842

Resistances: 26,150-26,200

Nilesh Jain, Centrum Broking, said a breakout above 26,100 can push Nifty towards 26,250; on the flip side, a break below 25,900 can drag the index towards 25,750.

Rupak De of LKP Securities expects resistance at 26,100 – 26,150 with immediate support at 25,900 - 25,950, with a drop below 26,000 aiding the pace of the correction.

Bank Nifty Today: What to Expect

After losing 59.55 points, or 0.10%, the Bank Nifty closed at 59,288.70 with a Doji candle that represents indecision amongst traders on the eve of the policy outcome.

In the opinion of Sudeep Shah from SBI Securities:

Support: 59,000 – 58,900 (20-day EMA)

Resistance: 59,600-59,700

A good move beyond either range would indicate the start of a new direction.

Ponmudi R, CEO of Enrich Money, said the index must stay above the key supply zone of 59,500 – 59,600 to maintain neutrality with a weak bias.

Immediate support: 59,000 to 58,900

Failure levels, if anything bad happens: 58,500 to 58,100

Key threshold: Trade Discovery above 59600 would drive a quick cover rally to 59500, 59650

His opinion was that traders should still be tactical instead of aggressive in picking long positions. He also urged sticking to support-based entries until a clear breakout is identified.