Bulls are ready to celebrate Diwali week on the back of a recovery in global markets Says Santosh Meena, Swastika Investmart Ltd
Below is quote on Diwali Market Outlook By Mr. Santosh Meena, Head of Research, Swastika Investmart Ltd.
Indian equity markets saw a decent rally last week after three weeks of consolidation. Markets remained resilient despite multiple headwinds as the dollar rose above the 83 mark against the rupee while US bond yields were at a record high. We are heading into a truncated festival week where bulls have reason to celebrate Diwali on a higher note, as the US market witnessed a sharp rebound in Friday's trading session.
The market will continue to have an eye on the direction of global markets, the dollar index, US bond yields, and crude oil prices. On the domestic front, October month expiry may lead to some volatility whereas Q2 earnings will cause stock-specific movement.
Technically, Nifty is witnessing higher highs and higher lows formation after respecting its 200-DMA. On the upside, 17725 is an immediate hurdle; above this, we can expect a rally toward the 17900-18000 zone. On the downside, 17400 is an immediate and strong support level while 17300-17200 is the next demand zone. As per open interest distribution, 17500 will act as a major put base ahead of monthly expiry.
Banknifty is outperforming and it is likely to head toward an all-time high of 41840. On the downside, 40500 is immediate support while 40000 is a strong support level.
Long exposure of FIIs in the index future is at 30% which is still in oversold territory while the put call ratio is at a neutral level of 1.03. The market is light and it will also have the support of short covering.
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