Nifty Index Reaches New Peak of 26,325.80 Despite Profit-Taking and Market Volatility

The Nifty Index recently reached a new peak of 26,325.80, although gains were limited due to profit-taking at higher levels. On Monday, the index slipped by 27.20 points, closing at 26,175.75. Similarly, the Nifty Bank Index hit a record high of 60,114.30 but faced mild selling pressure, dropping 71.35 points to end at 59,681.35.

Volatility saw a slight increase as India VIX rose by 0.06 percent to 11.62, indicating a minor rise in market anxiety and a decrease in risk appetite among investors.

Dhupesh Dhameja from SAMCO Securities noted that despite reaching new highs, the Nifty struggles to maintain these levels due to persistent selling pressure. He stated that a breakout above 26,350 is crucial for regaining momentum and triggering short-covering. The current pattern of higher highs and lows suggests a constructive structure with time-wise corrections rather than trend reversals.

Dhameja further explained that aggressive call writing near ATM strikes and firm put writing near the 26,000 support indicate a cautious sentiment among traders. A move above 26,350 could lead to an upside toward 26,500. However, as long as the index stays above 26,000, bulls are expected to hold their ground within a defined range.

Regarding the Nifty Bank Index, Dhameja highlighted that it faces similar challenges in sustaining gains at higher levels due to consistent selling pressure near record zones. A decisive breakout above 60,000 is necessary for upward momentum and short-covering. The ongoing pattern of higher highs and lows indicates a constructive trend with time-wise consolidation.

Dhameja pointed out that strong put writing at lower levels shows bullish confidence while call positions near resistance suggest expectations of sideways movement. A sustained move above 60,000 could push the index toward 60,500, with the 59,000 support zone being crucial for maintaining bullish sentiment.

Until a clear breakout occurs, adopting a range-bound trading strategy remains advisable for both indices.

Stock Recommendations

On December 2nd, Riyank Arora from Mehta Equities Ltd. recommended two stocks following Nifty's all-time high achievement.

Waaree Energies
Buy | CMP: Rs 3,179 | SL: Rs 3,080 | Target: Rs 3,300 / Rs 3,380
Waaree Energies is consolidating near its upper range with strong bullish structure intact. Support at Rs 3,080 holds firm while RSI remains positive. A close above Rs 3,220 could drive the stock toward Rs 3,300 and Rs 3,380.

Monte Carlo
Buy | CMP: Rs 757 | SL: Rs 735 | Target: Rs 780 / Rs 805
Monte Carlo has formed a base around Rs 735 and shows signs of upward reversal. Trading above short-term averages with improving momentum suggests potential rally if it moves past Rs 765.

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