Market benchmarks the Sensex and the Nifty settled with gains in the week gone by as investors remained hopeful of a fresh stimulus.
The Nifty50 rose 1.4 percent while the S&P BSE Sensex gained 1.7 percent for the week ended October 23 as compared to a 2.4 percent rally seen in the S&P BSE Midcap index and a 2.35 percent rally in the S&P BSE Smallcap index.
Broader markets outperformed the benchmark indices for yet another week, suggesting that investors were chasing growth. Foreign institutional investors remained net buyers while domestic institutional investors were net sellers in the previous week.
Will the trend continue? Here is what market analysts think:
Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services
The market is likely to remain in a tight range as the US election draws near. The technical setup suggests a range of 11,750-12,100 for the Nifty in the near term.
Given the prevailing earnings season and mixed global cues, we expect more stock-specific action. Apart from the US election, investors will watch out for ECB and BoJ monetary policy statements and US GDP data during the week.
We would advise traders to adopt a cautious approach while investors can accumulate quality stocks on dips.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
Traders need to be disciplined and careful while trading in the coming week. On a weekly basis, the market has formed a "narrow ranged inside body" formation.
It is certainly going to invite major volatility in the coming week, which is also the last week of the month's F&O contracts.
The market has spent time between 12,030 and 11,770. In between, the market witnessed stock-specific sizeable correction in the index giants like Reliance, TCS and HUL.
In the coming week, if these stocks start reversing from their current lows then it would not be difficult for the Nifty to cross 12,050.
The ideal strategy should be to trade long above the level of 12,050 as it could push the market towards 12,300-12,400 levels (near its all-time high).
Below 11,770, the Nifty can fall to 11,428, where it has left a bearish gap on a weekly chart.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
On the weekly chart, the Nifty formed a small positive candle with upper and lower shadow, which is similar to a high wave type pattern.
This candle pattern was formed beside the negative candle of the previous week. The upper area of 12,025 has been acting as a key overhead resistance in the last couple of weeks and this hurdle could be tested again in the coming week.
A sustainable upside breakout of this hurdle could have a sharp positive impact on the market. The short-term trend of Nifty continues to be range-bound and the near-term uptrend status remains intact.
There is a possibility of the index retesting 12,000-12,050 by next week before showing minor profit-booking again from the highs.
A decisive move above this hurdle could open the next upside of 12,250 and higher in the near term. The immediate support is placed at 11,825.
Ajit Mishra, VP-Research, Religare Broking
All eyes are on US markets for updates on the stimulus package and upcoming presidential elections.
The news on COVID-19 cases in Europe will also remain on the participants' radar. Volatility usually remains high in stocks during earnings season and we are seeing a similar trend.
Amid all, the market is offering ample trading opportunities but the key is to identify the right stocks. Since the bias is still positive, we suggest continuing with the “buy-on-dips” approach.
Nirali Shah, Senior Research Analyst, Samco Securities
The Nifty, after a swift rally from the channel support, has become overbought and is facing a brief resistance at 12,000.
A sustained weakness in global indices can lead to short-term pressure. Short-term immediate support and resistance for Nifty50 are now placed at 11,600 and 12,050.
The market is likely to take cues from the US election results which may have a significant impact in the short term, till then, avoid short-term swings and stay on the sidelines.
Joseph Thomas, Head of Research - Emkay Wealth Management
Some of the immediate factors that are of consequence to the markets like the discussions on the outcome of the US elections, the India-China border issue, the enhanced debate on a no-deal Brexit, etc. have been relegated to the background for the time being.
Most of the markets in Asia, and also Europe, reflect more or less the same picture. Increased volatility may set in in the coming week, with some of these dormant factors emerging actively on the scene.
Vinod Nair, Head Of Research at Geojit Financial Services
We believe markets, both global and domestic, will focus on the upcoming US elections and expect volatility to spike in the near term.
Sanjeev Zarbade, VP PCG Research, Kotak Securities
We advise investors to remain selective in buying stocks. Key events are stimulus discussions and elections in the US and COVID-19 spread in Europe.
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