SUDEEP SHAH HEAD, TECHNICAL & DERIVATIVE RESEARCH DESK, SBI SECURITIES


Where is Nifty headed?
The volatility index, India VIX, has slipped to 17.4 levels, indicating that volatility is gradually subsiding, thus providing a comfort factor to the bulls. Chart patterns suggest that the zone of 17,400-17,450 will be strong support going forward. Until the index sustains above the level of 17,400, we may witness continuation of this rally up to 17,850-17,950. However, if the index slips below 17,400, weakness could persist up to 17,180-17,050. Options data suggest a broader trading range of 17,400-17,950 for the upcoming week.

What should investors do?
The most crucial event is the US Fed meeting on November 2, ahead of which global markets are expected to witness heightened volatility. Hence, traders are advised to take hedged bets keeping leverage in check. Investors should look to buy the dips until 17,300 levels aren’t breached on the downside on Nifty. We expect stocks from the banking, defence, pharma, and IT sectors to outperform. Positive trade setup is visible in select large-cap names such as ITC, Axis Bank, ICICI Bank, Sun Pharma,

, and Titan. In mid-caps, stocks like Bank of Baroda, Deepak Nitrate, Polycab, and could continue to witness strong buying interest.

PRITESH MEHTA SENIOR VICE PRESIDENT, RESEARCH, YES SECURITIES


Where is Nifty headed?
In Friday’s session, the supply between 17,600 and 17,650 is a 61.8% retracement of the previous decline, a three-digit Gann number of 176(00), and the peak of red tall bar formed on September 23, resulted in a throwback off the day’s high. Momentum above the same is essential. The index has struggled to break on the upside, yet downside momentum has not been strong, highlighting the in uence of support. Our customized Nifty breadth shows that 28% of stocks show bullish setups, a decline in trend since the start of the week. In such a scenario, time-wise consolidation is expected with support at 17,400.

What should investors do?
Nifty PSU Bank index marked a new peak, breaking above the one-month consolidation zone. Positive internal breadth suggests a continuation of strength in PSU banks. The ratio of PSU Bank vs Nifty is currently a whisker away from February 2020 peak. Renewed outperformance would come into play above that level. SBI, Bank of Baroda and Canara likely to rally 9-10% within the space. Meanwhile, the ratio of Nifty Auto vs Nifty has retraced lower from the hurdle zone, currently trading below the August low, suggesting further underperformance from autos in the near term.

DHARMESH SHAH HEAD OF TECHNICAL,


Where is Nifty headed this week?
Nifty formed a sizeable bull candle last week, indicating a continuation of a positive trend. We reiterate our structurally positive stance and expect the Nifty to gradually head toward 18,100 in coming weeks, while in the upcoming truncated week, we expect the index to test the 17,800 mark. Strong support exists at 17,300 levels. Our stance is based on a) the relative outperformance of Indian equities against global peers; b) India VIX continues to cool off, indicating low perception of significant risk by market participants in the near-term; and c) the rupee is placed at key support of 83.0-83.3. We expect the rupee to stabilise and appreciate gradually against the dollar.

What should investors do?
Investors should focus on buying quality largeand mid-cap stocks amid volatility, if any, with a focus on BFSI, PSU, IT and telecom space that is expected to outperform. We prefer SBI,

, , , and L&T in the large-cap space, while in midcaps, we prefer Bank of Baroda, Concor, Coforge, Bharat Dynamics, and .