Weekly Market Outlook for 30 October to 3 November

In the week gone by, our markets corrected sharply led by negative global news flows and FII’s selling. Nifty corrected upto 18850 on the October series monthly expiry day, but managed to recover on the last trading session of the week and ended above 19000 with a weekly loss of over two and a half percent.

Nifty Today:

Nifty witnessed the steepest weekly correction since the month of April as the down move was led by the broader market correction. The midcap and the small cap stocks which had rallied significantly in last few months too witnessed a sell-off during the week. Technically, the momentum readings were in oversold zone in Nifty as the index breached 18900 mark and this led to a pullback move in Friday’s trading session. However, since the RSI oscillator has given a negative crossover on the short term as well as the medium term charts, the Friday’s move should be seen as a pullback move only for now. FIIs have rolled over significant short positions to the November series and have short heavy positions. A move above 19100 could lead to some short covering upto 19220 and 19300 in the coming week which would be immediate resistances to watch for. On the lower side, 18900-18800 would now be seen as the immediate support and if this zone is breached, then the down move would extend. Since the global news flows had a significant impact off late, the short term momentum in the markets is likely to be driven by such news flows. We advise traders to avoid aggressive buying near the mentioned resistance levels. It would be better to trade with a stock specific approach for a while and keep a close tab markets reactions around the mentioned levels.

Nifty recovers from lows, but not out of the woods yet 

The Midcap and the Small cap indices corrected sharply but have managed to form low around their 100-day EMA. Last Thursday’s low shall be important support levels for the near term and one shall trade with a stock specific approach in this space.  

Nifty, Bank Nifty Levels and  FINNIFTY Levels: