Weekly Market Outlook for 20 November to 24 November

In the week gone by, Nifty rallied higher led by the positivity in the global markets. However, the index resisted around 18850 which was also the high seen in the month of October and it ended below 19750 with weekly gains of a percent.

Nifty Today:

Our markets witnessed a smart recovery in last three weeks from the recent swing low and reclaimed the 19800 mark. However, the banking index has relatively underperformed as it did not retrace as much as the Nifty index, and we saw a sharp sell off on Friday post the overnight news of RBI increasing risk weightage on certain categories of loans. The Bank Nifty index breached its crucial moving average supports, while the supports on the Nifty index are still intact. Also, the midcap and the small cap indices have rallied significantly recently and the momentum readings on the lower time frame charts in these indices are in the overbought zone. As far as F&O data is concerned, not many short positions are covered in this upmove and FIIs still have more than 75 percent of the positions in the index futures on the short side. Thus, the above data and chart structure indicates mixed cues for the markets. While there’s no weakness in Nifty, a move above 18875 could lead to further momentum towards 20000 and beyond. On the flipside, 19600-19500 is the immediate support zone. 

Banking stocks witnesses sell-off on RBI’s news of increasing risk weightage

The Banking index looks weak as of now, with resistance around 44000-44200. The midcap and the small cap index have overbought set-ups, so one should be cautious here and keep a buy on dip approach rather than chasing stocks at higher levels. Traders are advised to trade with a stock specific approach and look for buying opportunities in defensive sectors such as FMCG which has relatively better risk reward ratio at current levels.

Nifty, Bank Nifty Levels and  FINNIFTY Levels: