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Below the Market Analysis 28 October 2023 by Mr. Ajit Mishra, SVP - Technical Research, Religare Broking Ltd

Markets plunged sharply lower in the passing week and ended the 3-month long consolidation phase. The tone was bearish for most of the week however rebound in the final session trimmed some losses. Eventually, both benchmark indices, Nifty and Sensex, lost over two and a half percent and settled at 19,047.20 and 63,728.80respectively. All sectors felt the heat wherein metal, realty and financials were among the top losers. The broader indices too witnessed pressure and lost in the range of 2%-3%.

Apart from the domestic factors, continuous weakness on the global front is weighing on the sentiment. Among the major markets, the US markets have been declining for the last 3 months and there is no sign of reversal yet. Though the existence of support around 32,500 may prompt some rebound, sustainability seems difficult to multiple hurdles around the 33,200-33,500 zone. On the flip side, 31,600 would be the next major support,in case of a breakdown.

Nifty has ended 3-month long consolidation phase and tested the long term moving average (200 EMA) after six months. It has already retraced ~7% from its record high but a breakdown below 18,800 could trigger the next leg ofa slide to 18,200-18,500zone. In case of a rebound, the hurdle around the 19,200-19,500 zone would cap the upside.Among the key sectors, banking still looks weakest while select stocks from the auto, realty, FMCG andpharmaare still holding strong so plan your trades accordingly. Since choppiness is high on the broader front, traders should prefer index majors, with focus on shorting opportunities on the rise.

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