Initiate fresh long positions only if Nifty 50 decisively breaches 24,500 level, says Ravi Singh of Religare Broking | Stock Market News

Expert View: Dr. Ravi Singh, SVP- Retail Research, Religare Broking believes the current market outlook appears unpromising for the next few months, with potential positive momentum likely only after January 15, 2025. He advised initiating fresh long positions only if the Nifty decisively breaches the 24,500 level, as this could indicate the beginning of sustained bullish momentum. However, the prevailing market dynamics suggest a stronger presence of sellers, which continues to weigh on overall sentiment. Edited Excerpts:

What is your Nifty December 2024 end target?

Nifty remains in a “Sell on Rise” mode as long as it trades below the key resistance level of 24,500. The index is likely to trend toward the 23,500 mark in December due to the significant presence of sellers at higher levels. For any meaningful upside, the Nifty must sustain above 24,500.

In the options market, the highest Open Interest for December monthly contracts is concentrated at the 23,000 Put and the 25,000 Call strikes. These levels indicate key support and resistance zones, respectively.

Do you believe midcaps and smallcaps will outperform benchmarks in 2025 as well?

The current market outlook appears unpromising for the next few months, with potential positive momentum likely only after January 15, 2025. By then, the market may align expectations for Budget 2025. Post-mid-January, midcap and smallcap stocks could potentially outperform benchmark indices, however, significant outperformance is unlikely before that timeframe.

What is your view on the recent muted performance of major IPOs? How long do you think this trend will continue?

The performance of IPOs is largely influenced by the quality of management and the financial health of the issuing companies. However, market sentiment plays a critical role. Given the subdued market conditions over the past two months, IPOs have struggled to deliver strong performances, reflecting broader market challenges and investor caution.

Do you see the correction continuing for the remainder of 2024 or will there be an upward swing around year-end?

The benchmark indices are exhibiting a neutral to negative bias, warranting a cautious stance in the current market environment. Initiating fresh long positions is recommended only if Nifty decisively breaches the 24,500 level, as this could indicate the beginning of sustained bullish momentum. However, the prevailing market dynamics suggest a stronger presence of sellers, which continues to weigh on overall sentiment.

What lessons did you learn from 2024?

The stock market in 2024 reinforced critical investing lessons. It highlighted the importance of diversification as geopolitical tensions and economic uncertainties created volatility. The need for a disciplined, long-term approach became important. Ultimately, resilience and informed decision-making were key takeaways for navigating market challenges.

What challenges do you foresee in 2025 for the Indian markets?

Over the next year, two key risks—geopolitical and economic—are expected to significantly impact the Indian stock market. Prolonged geopolitical tensions could trigger the market’s ability to sustain higher levels, while the economy grapples with multiple ongoing challenges. If these issues are resolved favourably in the coming months, the market could maintain a positive momentum. However, until clarity emerges, the overall outlook is likely to remain cautious and negative.

Do you expect FPI inflows to return in December?

A sustained positive performance in the stock market over the coming days could potentially attract Foreign Portfolio Investors (FPIs) back to the Indian market. However, until such a trend materialises, FPIs are likely to remain cautious. A clearer market direction is anticipated to emerge only by mid-January.

Which sectors would you suggest avoiding next year?

The upcoming year is anticipated to present significant challenges for stock markets, driven by geopolitical and economic uncertainties. These factors are expected to put pressure on the IT and realty sectors. Therefore, it may be prudent to avoid heavy exposure to these sectors in the near term. Instead, allocating investments to defensive sectors could provide greater resilience against market volatility.

One piece of advice for new investors

For new investors, the key is to focus on long-term wealth creation rather than short-term gains. Start with diversifying your portfolio across sectors to eliminate risks, and invest in fundamentally strong companies. Avoid going aggressively with current markets and wait for the market to settle volatility.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.