Sensex, Nifty Flat Start: Will Indian Markets Break the Jinx for Retail Investors?

Opening Hook

As the Indian benchmark indices, Sensex and Nifty, gear up for a flat to positive start, the big question on everyone's mind is: will this be the day when the markets finally break the jinx and head north? With the GIFT Nifty trading marginally higher, the signs look encouraging, but can we expect a significant upmove?

Quick News Summary

The Indian equity markets ended lower for the second consecutive day on December 16, with the Sensex down 533.50 points or 0.63 percent at 84,679.86, and the Nifty down 167.20 points or 0.64 percent at 25,860.10. The BSE Midcap and Smallcap indices were down nearly 1 percent each.

Original Analysis

Looking at the historical behavior of the Nifty, we can see that whenever the index has fallen for two consecutive days, it has usually bounced back on the third day. This is because the Indian market is known for its mean-reverting nature, where it tends to move back to its average value after a period of high volatility. Moreover, the Relative Strength Index (RSI) of the Nifty is currently at 40, which indicates that the index is oversold and due for a bounce. Trending now on Twitter: #Nifty #Sensex

Another important factor to consider is the trader psychology. When the markets are in a downtrend, traders tend to become bearish, and this can lead to a self-reinforcing cycle of selling. However, when the markets start to show signs of recovery, traders can become bullish quickly, leading to a rapid upmove. As the Wall Street Journal reported, the US jobs data was sluggish, but this did not deter investors from buying into the markets.

What Should Traders / Investors Do Now?

• Intraday traders: Look for buying opportunities in the Nifty and Sensex, with a stop-loss below the previous day's low.
• Short-term traders: Consider buying into the markets on dips, with a target of 26,000 on the Nifty.
• Long-term investors: Use this opportunity to accumulate quality stocks, with a long-term perspective.

Frequently Asked Questions

• Will Nifty fall after this news? The probability of a fall is low, given the oversold nature of the index.
• Is this good or bad for bank stocks? The news is neutral for bank stocks, as the interest rates are not expected to change.
• What should retail investors watch next? Retail investors should watch the movement of the Nifty and Sensex, and look for buying opportunities on dips.

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