It was a good week for the bulls, as the Sensex and Bank Nifty hit record highs, whereas the Nifty ended at a record closing high. This week, Nifty will look at completing its unfinished business by hitting a fresh all-time high. The good news is that the laggard, broader market, is trying to catch up as well.
A fall in the dollar index and US bond yields after some dovish comments from US FOMC minutes created positive momentum across the globe, while a drop in crude oil prices and short covering in the F&O market fueled positive momentum in the market.
This week, our Q3 GDP numbers and monthly auto sales numbers will be key domestic factors. On the global front, the market will keep an eye on data from the US and any further movement of the dollar index and US bond yields. Apart from this, the news flow from China will continue to cause some volatility.
Technically, Nifty may cross its previous high of 18604, where 18611, 18888, and 19000 are the next resistance levels. On the downside, 18440 and 18300 are immediate support levels, while 18100-18000 is major demand zone.
The leader of this rally, Bank Nifty, witnessed some fatigue on Friday, but the overall structure is still bullish. On the upside, 43,333 is an immediate hurdle, while 44,000 is the next target level.
The December series is starting on a heavy note as FII’s long exposure in index futures stands at 72%, whereas Nifty witnessed a high rollover with a hefty premium of around 150 points. The put/call ratio stands at 1.18 level. Extreme bullishness is only a concern for the market and may lead to some profit booking or consolidation; however, the overall outlook is still bullish.
Santosh Meena, Head of Research, Swastika Investmart Ltd.
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