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Nifty breaks out of five week's consolidation, 25200 in sight

ICICIdirect Research 06 Dec 2024 DISCLAIMER

Broader market endured its relative outperformance as Nifty Midcap, Smallcap gained >4% while Nifty surged 2% tracking RBI policy outcome and settled the week at 24650.

What to expect: Five weeks consolidation breakout (24500-23300) augurs well for extension of up move towards 25200 in coming weeks. Meanwhile, support base is now revised upward at 24000

Bank Nifty : The follow through strength post 2 months consolidation breakout signifies acceleration of upward momentum that makes us believe, Bank Nifty would challenge life highs of 54400 in coming weeks 

Broader Market : The strong recovery in Nifty midcap and small cap index (9% and 12%, respectively) resulted into breakout from three months falling trend line. Nifty small cap index is just 1% away from All Time High  

Breadth indicator: Revived traction in broader is backed by improvement in market breadth bodes well for durability of ongoing uptrend. Currently, 56% stocks of Nifty 500 universe are trading above 50 days SMA compared to last week's reading of 35%

Global Market: Global equity markets like DJIA, DAX have been clocking fresh All Time Highs. We expect catch up activity can be seen in domestic market tracking its positive correlation with developed markets

Sectorally, BFSI, Capital Goods & Infra, IT, pharma would be in focus while realty, metal offer bargain buy opportunity

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