Weekly Market Outlook for 31 Oct to 4 Nov

After the F&O expiry session, Nifty started trading for the day on a flat day and consolidated within a narrow range throughout the day. However, the banking space witnessed selling pressure due to which divergence was seen in the Bank Nifty index on Friday. Nifty ended the day tad below 17800 with marginal gains while the Bank Nifty index posted a loss of over 300 points on Friday.

Nifty Today:

Nifty index consolidated within a range in the truncated week wherein the index oscillated within a range of 200 points of 17640-17840. It could just be seen as a consolidation or a time wise correction after the recent rally from 17000 to 17800. Now, there was some divergence seen in the banking index in Friday’s session as the banking space witnessed some selling pressure. However, the short term trend for both the indices still remains positive as they have not breached their important supports. So inspite of this one day's divergence, we would see how the follow up move pans out in the coming week and until the index breaks any crucial supports or there’s change in data, one should trade with a positive bias. FII’s have started the November F&O series with net long positions (Long Short Ratio at 59%) and the Dollar Index too has cooled- off recently which is supportive for equity markets. Hence, from a positional perspective, the near term trend continues to be positive as of now and hence, one should look for buying opportunities. The market breadth, however, has not been robust as the Midcap and the Small cap index has not seen any positive momentum. So traders need to be selective in their stock specific approach and look for opportunities in sectors which are showing outperformance. 

Divergence seen in Nifty and Bank Nifty, but trend remains positive till supports are intact

The near term supports for Nifty are placed around 17650 and 17470 which would be the crucial levels to watch out for. On the flipside, if the index resumes its upmove from this one week of consolidation then it could rally towards 18000-18100 in the near term. Amongst sectoral indices - Auto, Energy, and Infrastructure are showing positive signs on charts and thus, traders should look for buying opportunities in stocks from these sectors from a short term trading perspective.

Nifty & Bank Nifty Levels: