Global data points, monthly F&O expiry to dictate market trends this week: Experts

The Indian benchmarks snapped a three-week gaining momentum and closed weaker in a truncated week ended September 22 amid rising diplomatic tension between India and Canada, concern over the Fed keeping the interest rates higher for a longer period, surging crude prices, and sustained selling by foreign investors. The BSE Sensex fell 2.69 percent or 1,829.48 points to close at 66,009.15 during the week and Nifty50 shed 2.56 percent or 518.1 points to end at 19,674.25. Here's a collection of views from experts on the expected market dynamics for the week ahead.

Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas | The Nifty is trading at a crucial support zone of 19,720 – 19,620 where support parameters in the form of 40 moving average and key Fibonacci retracement level is placed. The speed of the fall has slowed down as the hourly momentum indicator has a positive crossover which indicates that a pullback is likely before the next leg of the fall resumes. The pullback can be till 19,850 – 19,880 where key hourly moving averages and the gap area formed on September 21 is placed. In terms of levels, 19,620 – 19,604 is the crucial support zone, while 19,850 – 19,880 shall act as an immediate hurdle zone.

Santosh Meena, Head of Research, Swastika Investmart | This week marks the September month Futures and Options (F&O) expiry, which is expected to bring about volatility in the market. From a technical standpoint, the Nifty is undergoing a correction. The range of 19,640–19,580 is a critical demand zone where a rebound is likely. Below the 19,580, the 19,300–19250 range will be the next important demand zone. On the upside, resistance levels are expected at 19,850 and 20,000. Bank Nifty has experienced a sharp correction with a double top formation at the 46,300 level. It is trading near the critical support of the 100-day moving average (DMA) at 44,500, where a bounce-back is anticipated. Below 44500, the 44,000–43,700 range will be the next support zone. Resistance levels on the upside are anticipated at 45,000 and 45,500.

Amol Athawale, Vice President - Technical Research, Kotak Securities | On weekly charts, the Nifty has formed a long bearish candle, indicating a weak sentiment in the near future. However, due to temporary oversold conditions, we could expect a one quick pullback rally in the near future. For the short-term traders now, the 50-day SMA (Simple Moving Average) 19,600 and 19,500 would be the key support zones, while 19,800 and 19,900 could be key the resistance areas. For the Bank Nifty, the 50-day SMA or 45,000 would be the sacrosanct support level. As long as its trading below the same, the weak sentiment is likely to continue. Below which, the index may slip till 44,300-44,000. On the flip side, a fresh uptrend is possible only after the dismissal of a 50 day SMA or 45,000, above which it could move up till 45,400-45,500.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | We expect the market to remain under pressure in the near term given the global concerns. Thus, we suggest investors to have higher allocation towards defensive and large-caps. Investors would look for economic data like US and UK GDP numbers, EU inflation, US and China Manufacturing PMI, and India’s Infrastructure output which is due next week for further direction.