Last Week

The first three days of the week opened with gap-ups but Thursday and Friday saw heavy profit booking. The largest weekly fall in the last 8 months for NIFTY.

NIFTY opened the week with a gap-up at 18,229 and even went below the 18k mark intraday and bounced back. From Monday’s low, it moved up 370 points to Wednesday’s high. On Thursday and Friday, it was heavy selling in the market.

On Friday, NIFTY ended the week at 17,671, down 560 points or 3.07% from Monday’s opening.

BANK NIFTY opened on Monday with a big gap-up at 40,961 continuing last week’s power. It touched an all-time high above 41,800 and fell more than 3,400 points from there to Friday’s low. BANK NIFTY closed the week at 39,115, down 1,850 points or 4.5% from Monday’s opening.

Private banks led the heavy profit booking, with ICICI Bank being an exception after opening with a huge gap-up on Monday.

All sectoral indices closed in the red, with Private Banks IT, metal and realty indices falling heavily. Unlike last week, NIFTY Midcap and Smallcap did not fall as much as NIFTY.

Foreign Institutional Investors(FIIs) have net sold Rs 15,700 crore worth of equity shares in the week. Domestic institutional investors(DIIs) net bought Rs 9,427 crores worth of shares during the week. With this, FIIs have sold more than Rs 25,572 crores to date this month while DIIs net bought just Rs 4,500 crores.

Week Ahead

Markets in the U.S including Dow Jones and S&P 500 are trading at their all-time highs, with a rally last week.

Even this week, multiple companies including 6 from NIFTY 50 are announcing results – HDFC, Tata Motors, Bharti Airtel, State Bank of India, Sun Pharma, Eicher Motors and Divis Laboratories.

The U.S. Federal Reserve Policy meeting is scheduled to be held on November 2-3, should be watched out for because there is a possibility of the beginning of lower economic support in mid-November.

As the month starts, we will see multiple economic data from India also coming out. In the first week, we can expect auto sales data and corresponding volatility in those stocks.

The highest call OI stands at 18,000 followed by 19,000 and 18,500. There is once again low put buildup across the market with Highest Put OI at 17,500 followed by 17,000.

SGX Nifty closed below 17,814 yesterday, in the green from yesterday.

India VIX, which measures the expected volatility in the market, decreased by 5% this week.

The index has now shown bearishness in the weekly and monthly charts. Even the NIFTY Smallcap and Midcap indices have formed a huge wick if you look at the monthly charts. In case the next candle closes below this current monthly candle, we can expect a bearish market going ahead.

There is a 50-day moving average in NIFTY around Friday’s low. So we can take a candle closing under 17,600 would indicate bearishness. The 18,000 mark could act as a good resistance even with the expected gap-up opening tomorrow.

BANK NIFTY has supports at 39,000, 38,900, 38,780, 38,600 and 38500. Resistances are 39300, 39500, 39,750 and 40,000.

The November Future for NIFTY data shows that fewer contracts have been rolled over from last month, which is relatively low in comparison with the last couple of months. The level to watch for bullishness is the all-time high for the index.

What do you think will happen to Nifty this week? Will we see a bounce back from the moving average levels? Or will we see further profit booking? Let us know what you think in the comments section of the marketfeed app.