Weekly Market Outlook for 3 Oct to 7 Oct

It was a roller coaster week for the market participants as the Nifty started the week with a gap down and corrected sharply till the expiry day to sneak below 16800 mark. However, on the last trading session of the week, we witnessed a sharp pullback and the index recovered some of the losses and ended tad below 17100 with a weekly loss of over a percent.

Nifty Today:

Nifty corrected sharply for most part of the week as the Dollar Index continued to surge higher and the sharp depreciation in INR led to cautiousness amongst market participants. During last week, FED increased the interest rates which led to a sell-off across the globe and in line with that our markets too corrected sharply. On Friday, RBI too increased the interest rates which was much on expected lines and it triggered a short covering move leading to a pullback above 17000 at close. The momentum readings on the hourly charts were in oversold zone and hence this pullback was much on the cards to relieve the oversold set ups. With Friday’s upmove, the Nifty index has formed a ‘Bullish Engulfing’ pattern on the daily charts around its ‘200 EMA’. However, FII’s have turned sellers again in the cash segment and have rolled over their short positions in the index futures segment too which indicates their bearish stance for the October series. Also, as per the Elliott Wave Analysis, this seems to be an impulsive down move which hasn’t completed its five waves yet. Hence, as of now we are readings Friday’s upmove as just a pullback move within a short term downtrend. So our markets are not out of the woods yet and hence could continue to see higher volatility and witness selling pressure at higher levels.

Market recovered some of the losses to end the week above 17000

The immediate resistances for the index will be seen around 17200 and 17330-17380 range, where traders should look to lighten up longs in this upmove. On the other hand, the immediate support for the index are placed around 16750 and 16500. 

Nifty & Bank Nifty Levels: