Trade setup for November 29: The Nifty witnessed a sharp reversal on Thursday, falling over 450 points from its intraday highs and closing nearly 2% lower. This steep decline erased the strong gains seen earlier in the week and has sparked discussions among traders and analysts. Factors such as geopolitical tensions between Russia and Ukraine, expiry-related volatility, and natural retracement after a robust recovery have been cited as reasons behind the sell-off. The index also broke the crucial 24,000 support level, raising concerns about further downside.
Key Drivers of the Fall
The heavy sell-off was primarily driven by index heavyweights, including:
- Infosys
- Reliance Industries
- HDFC Bank
- ICICI Bank
- Mahindra & Mahindra
These stocks accounted for 44% of Nifty’s total losses, contributing significantly to the day’s downturn.
Interestingly, despite the Nifty’s slump, broader markets showed resilience. Both the Nifty Midcap and Smallcap indices managed to close near flat, suggesting a divergence in performance between large-cap and mid-to-small-cap stocks.
F&O Highlights for November 29
As the new series kicks off on Friday, traders will closely watch the introduction of 45 new stocks in the Futures & Options segment, including:
Fresh long positions were observed in Astral, IndiGo, GMR Airports Infra, CONCOR, and GNFC, while stocks like Glenmark, HDFC Life, Dr. Lal Pathlabs, and Max Financial Services saw short additions.
Nifty Technical Analysis
The sharp fall on Thursday has left traders pondering the next move. Here’s what market experts suggest:
| Analyst | Key Levels & Outlook |
|---|---|
| Chandan Taparia (Motilal Oswal) | A bearish candle has formed on the weekly chart, signaling further downside unless 24,350 is reclaimed. He recommends selling on any bounce with a downside target of 23,600. |
| Nagaraj Shetti (HDFC Securities) | Views the correction as a buying opportunity in the 23,900-23,600 range, suggesting potential for a higher bottom reversal. |
| Shrikant Chouhan (Kotak Securities) | Believes technical recovery is only possible if 24,000 is reclaimed. Otherwise, expects downside levels near 23,850-23,750. |
Nifty Bank Outlook
The Nifty Bank Index also faced significant volatility, hitting an intraday high of 52,800 before retreating to 51,750.
| Analyst | Key Levels & Outlook |
|---|---|
| Om Mehra (SAMCO Securities) | Notes the formation of a bearish engulfing pattern on the daily chart. Resistance lies at 52,600, with support at 51,270. |
| Hrishikesh Yedve (Asit C Mehta Investment Intermediates) | Recommends booking profits on any bounce as the index has failed to break the 52,500-52,800 resistance zone. Immediate support is at 51,490, followed by 50,980. |
Geopolitical and Institutional Activity
The reversal on Thursday coincided with:
- Escalating geopolitical tensions between Russia and Ukraine.
- Heavy selling by foreign institutions, reversing their recent buying spree fueled by MSCI rebalancing.
However, domestic institutions stepped in as net buyers, cushioning some of the fall.
Stocks to Watch
Several stocks saw significant developments:
- Adani Total, Paytm, LIC, and Angel One have revised their price bands to 10%.
- HDFC Life, SBI Life, and Max Life Insurance issued clarifications denying any directives from the IRDAI regarding rumored changes to bancassurance regulations.
Trade Setup for November 29
The focus for traders remains on:
- Reclaiming 24,000 on the Nifty for a bullish reversal.
- Monitoring the newly introduced F&O stocks for potential opportunities.
- Keeping a close watch on global geopolitical developments and institutional flows.
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