Market forecast - What to expect in the first week of the year?

2 Jan 2023 , 12:08 PM

Indian equity markets are more likely to see positivity in the first week of the new year. January is usually a positive week for equity markets. Funds get their new allocations for the year. There is a high probability that foreign investment funds will increase their allocations to Indian equity markets this year. The only thing that can come in the way is the high valuation at which Indian stocks are currently trading.  Average forward P/E ratio at which Indian stocks are currently trading is 22. According to data from The Economist, P/E ratio of Chinese stocks is currently only 10; those of Brazilian stocks is only 7. Such a high valuation for Indian stocks may trigger profit-booking driven sell- off too. So the probability that markets may show a bearish trend is also there.

 On the technical front, support for Nifty 50 is seen at 17800. Resistance is seen at 18473. Auto stocks and FMCG stocks are likely to trade  with a bearish bias this week. 

A SELL call is being  given on the stock of Apollo Hospitals for this week. Target Price is Rs 4305. Stop Loss is Rs 4600.

A BUY call is being given on the stock of Canara Bank for this week. Target Price is Rs 348. Stop Loss is Rs 322.