NIFTY WEEKLY OUTLOOK & OPTION CALL PUT TIPS FOR 3 OCTOBER TO 7 OCT 2022

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WEEKLY RESISTANCE FOR NIFTY: 17000, 17200, 17500

PIVOT POINT: 16900

WEEKLY SUPPORT FOR NIFTY:  16700, 16500, 16300

WEEKLY CHART FOR NIFTY

Our market tumbled over the rising concerns of weakening INR and the ongoing global correction. At the very start of the week on 26 September 2022, the key indices tested the crucial support levels, implying the spread of timidity in the overall market space. The benchmark index Nifty50 witnessed a gap down opening that further aggravated and dragged it below the psychological mark of 17000. However, post the hustles in yesterday’s session, the index managed to settle the day a tad above 17000 levels, with a cut of 1.80%. On 27 September the Indian equity market started the day on a mild note amid mixed global cues, wherein the benchmark index seemed a bit nervous from the early trades and slipped into the negative terrain. However, the dip augured well for the bulls, and they made a modest recovery by the mid-session. But by the fag end, the correction triggered again resulting in a tentative closure with a mere loss of 0.05% and settled a tad above the 17000 mark. The weakness in the Asian market led to a gap down opening for Indian equities on 28 September. The benchmark index tumbled nearly 150 points at the opening bell, setting a bleak start. Though the buying was quite relevant at the lower levels, that gradually pulled the indices upwards by the mid-session. However, the bulls could not cope up at the higher grounds, and the index tumbled to the day’s low by the end of the session. With all the hustles, the benchmark index concluded the sixth consecutive day in red with a cut of 0.87%. Our market has seen an optimistic start with a decent gap up on 29 September 2022, wherein the benchmark index Nifty50 tested the 17000 mark at the opening bell. But soon after, a sell-off got triggered that gradually dragged the index below Wednesday’s low, signifying the strength of the bears at higher grounds. With the intense day of sell-off, Nifty continued the selling streak for the seventh day in a row and settled a tad above the 16800 level with another cut of 0.24%. on Friday 30 September 2022 RBI in its policy meeting raised its benchmark repo rate by 50 basis points to 5.9% which was in-line with market expectation. Since May’22 RBI has raised interest rate by 190bps and expect repo rate to be raised to 6.5% in this cycle. It expect inflation to come down close to its target of ~4% over a two-year period and projected real GDP for FY23 at 7%. Post RBI’s commentary, Nifty bounced in green and gained strength throughout the session. The rally was especially seen in banking sector stocks. This has also given some support to falling rupee which had depreciated by 7% since April’22.  With most key events now behind, market finally found some strength on Friday. After 7 consecutive falls, Nifty witnessed strong rally and closed with gains of almost 300 points. It also reclaimed the 17,000 zones, making the short term technical view positive. Indian benchmark indices ended sharply higher on September 30 with Nifty closing above 17,000 after Reserve Bank of India (RBI) announced repo rate hike by 50 bps. At Close, the Sensex was up 1016 points at 57426, and the Nifty was up 276 points at 17094.

NIFTY & BANKNIFTY: STRONG SUPPORT& STRONG RESISTANCE LEVEL

For the trend following traders the 200- day SMA (Simple moving Average) and 16900 would act as a sacrosanct support zone. Above the same, the reversal wave is likely to continue till 17250. Further upside may also continue which could lift the index till 17400. On the flip side, below 16900, uptrend would be vulnerable and on further decline the index could slip till 16800-16700.

TECHNICALLY SPEAKING

With most key events now behind, market finally found some strength on Friday. After 7 consecutive fall, Nifty witnessed strong rally and closed with gains of almost 300 points. It also reclaimed the 17050 zones, making the short term technical view positive. Nifty can now move towards 17400-17700 zones with key support around 17000 and 16800. Auto and consumption sectors would be in focus ahead of monthly sales data and high demand in the ongoing Navaratri festival. Pharma sector is seeing some value buying as market focused on defensive names in times of global uncertainty. However, global macro factors will continue to dictate the domestic market sentiment going ahead as any fresh spell of negative news could once again trigger the downward spiral. Technically, after a sharp selloff the Nifty took support near 16800 and bounced back sharply. On daily charts, the index has formed a long bullish candle, and also formed a promising Hammer candlestick formation on weekly charts which is broadly positive. For the trend following traders the 200- day SMA (Simple moving Average) and 16800 would act as a sacrosanct support zone. Above the same, the reversal wave is likely to continue till 17500. Further upside may also continue which could lift the index till 17700. On the flip side, below 16600, uptrend would be vulnerable and on further decline the index could slip till 16400-16000. Nifty snapped its losing streak as the index posted a gain after seven consecutive days of correction. On the lower end, it found support at 16800 and moved up. On the daily chart, the index has formed a bullish engulfing pattern. The daily RSI is seen to be entering the bullish crossover. Going forward, the trend may remain bullish with an upside potential of 17300/17500. On the lower end, 16800/16600 may continue to act as crucial support for the short term.