Week Ending October 25th 2024

Dear patrons, it was a bad week for bulls, as bears took full control of the Indian markets and plummeted almost all stocks to the lowest levels in recent times. Foreign Institutional Investors have been selling Indian stocks consistently for last month or so while Domestic Institutions are buyers. 

A question arising in all investors' mind, why this selling by FIIs? Let's try to enumerate the points leading to this selling.

• Global instability is a major concern. Particularly tensions in the middle east. The middle East war is having an adverse impact on behavior of Crude Oil prices, causing further unrest for the investors.
• US Elections are making FIIs jittery and they are being safe with hands on cash. Wait and watch looks to be their strategy till new Government is formed in the US.
• Increase in Capital Gains Tax in India has had a big impact on FII outflow.
• Changes in policy by SEBI for derivatives markets. Stricter norms and uneven ASM criteria also play a major role.

US markets have been topsy turvy over last week, closing positive one day and negative one day. Global markets have been in good shape over last week. European indices remained mostly positive.

Let's have a look at technical charts and try to figure out what lies in store for the coming week.

Nifty could not cross 25000 and reversed sharply over the week. In a vicious bout of selling levels tend to lose sanctity. However, we should not ignore levels. Nifty has resistance 24500-24600 range. Only a move above 24900 will reverse the current negative trend. Support for Nifty is placed around 23800-23700 range.

BankNifty has fared better than Nifty in all the mayhem. 51000 did hold till Friday, but eventually fell on weak numbers by some of the banks. BankNifty should find support around 50200-50100. Resistance for BankNifty lies around 51100-51200 levels. Late surge in BankNifty on Friday and a good set of numbers by ICICIBANK, particularly the asset quality should keep BankNifty buoyant, and it may move northwards.

Markets have corrected by around 10% from life-time high levels. We may be in for a relief rally in the markets over next few days. As long as Nifty remains below 25000 it is a "Sell On Rise" market.

Investors should look to accumulate good quality stocks in this fall. Evry dip should be utilized for acquiring more good quality stocks.

Mantra remains the same "STAY INVESTED"

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.