The Indian stock market saw gain booking after Nifty surpassed 17800 and Bank Nifty also posted gain booking at 41500 in Friday trading while the US market has shown strength after good apple results and weak home sales numbers. Global markets are in brittle mode as everyone eyes the outcome of the upcoming US FOMC meeting scheduled for November 2, 2022. US 10-year bond yields also eased from 4.33% to 4.016%. The stock market will also be eyeing the unscheduled RBI MPC meeting. We are heading for final Q2 earnings which will result in a stock specific move. The October car sales figures will be important because they will inform us about the festival demand. Apart from that, institutional flows will play a crucial role as foreign investors have turned from sellers to buyers while domestic institutional investors are also giving their participation on the positive side. Technically, the overall structure is bullish but momentum is slowing as the Nifty has multiple resistance levels between 17850 and 17950 . On the downside, 17650-17500 is a strong demand zone. The Nifty can remain volatile to sideways on a positive bias. However, the sector and stock specific outperformance should continue. Bank Nifty is facing resistance in the 41600-42200 area while the 10-DMA is immediate support around 40500. Below that, 40200-40000 will be the next area of support. On the upside, if it manages to clear the 42,000 level, we can expect a move towards the 42,500-43,000 zone. Looking at the derivative data, FIIs start the November series 57% long in index futures. The put-call ratio is 1.23. Overall, the derivative data points to a neutral to positive bias, but the market is not supported by short covering.
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