Morning Outlook 29th October, 2022

NIFTY:

The NIFTY opened at 17756.40 with a gap up of just 20 points. The index initially moved up and crossed above 17800. Prices did not sustain there long and started drifting downwards. The index recorded its intraday high at 17838.90 and saw a steep fall. Prices have found support around 17750, consolidated there, and recorded its intraday low at 17723.70. Prices recovered in the late hour of trading and came into positive territory. The index finally closed at 17786.80 with a gain of 49.85 points or 0.28% up. AUTO and OIL&GAS outperformed today and closed with a gain of over 1%. METAL and PHARMA underperformed today and closed lower by more than 1% followed by IT and BANK. We have mentioned a strong resistance zone inside 17800 – 18000 in the NIFTY index. For the past four trading days, prices have been finding it difficult to break this zone. However, the index formed a tight narrow range near this resistance zone. Support is visible around 17400. The narrow trading range suggests we may see a sharp move here soon. On Monday, we should look for a buying opportunity on a breakout above 17850 or a shorting opportunity on a break down below 17650. In case of a gap beyond these levels apply the first 15-minute rule. Keep a stop of 80 points and a target of 240 points.

BANK NIFTY:

The BANK NIFTY opened at 41236.80 with a gap down of 99 points. The index initially moved higher, filled the gap, and move further on the upside to record its intraday high at 41482.40. However, prices did not sustain there long and started drifting downwards. A sharp decline brought prices to its intraday low at 40839.30. Prices have seen some recovery in the late hour of trading and finally closed at 41034.55 with a loss of 301 points. PSU and PVT BANKS both indices have performed almost the same today, saw a downside move, and closed lower by 0.45% & 0.66% respectively. Within the index, in terms of points, KOTAK BANK contributed the highest on the upside while ICICIBANK contributed the lowest. The short-term trend is up, and it will be up as far as prices are trading above 39500 support. The only visible resistance is at around 41840 which is also the lifetime high. Moreover, for the last four trading days, the index is moving very narrowly. These narrow movements suggest a sharp move is about to come. On Monday, we should look for a buying opportunity on a breakout above 41500 or a shorting opportunity on a breakdown below 40800. In case of a gap beyond these levels follow the first 15 minutes rule. Keep a stop of 300 points and a target of 800 points.

TECHNICAL PICKS

DERIVATIVE PICKS

TOP DELIVERY PERCENTAGE

UPCOMING ECONOMIC DATA

NEWS UPDATES

• Sensex ended higher by 203.01 points or 0.34 percent at 59,959.85. Nifty ended higher by 49.80 points or 0.28 percent at 17,786.80. About 1470 shares have advanced, 1868 shares declined, and 114 shares are unchanged.

• Market extended its winning streak for the second consecutive week (Diwali Week) and rose 1 percent on the back of better US GDP data, positive earnings, FII support and appreciation in rupee.

• SEBI on Friday reduced the face value of debt security and non-convertible redeemable preference share issued on private placement basis to Rs 1 lakh from the current Rs 10 lakh.

• Federal Reserve officials will maintain their resolutely hawkish stance next week, laying the groundwork for interest rates reaching 5% by March 2023, moves that seem likely to lead to a US and global recession, economists surveyed by Bloomberg said

Source: Economic Times,  Indian Express, Business Today, Livemint, Business Standard, Bloomberg Quint

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