Indian Stock Market Likely to Open Positive on Monday as Global Markets Rally; Key Support and Resistance Levels to Watch
1. Global cues: The global markets are expected to open on a positive note on Monday, following the strong earnings reports from major companies and the easing of China's power crisis.
2. Indian market: The Indian market is likely to follow the global cues and open on a positive note on Monday. The Nifty50 is expected to reclaim the 20,000-mark and test the all-time high of 20,041, while the Bank Nifty may also bounce back from the recent correction and cross the 45,000-level.
3. Earnings season: The earnings season will continue to be in focus this week, as some of the prominent companies that will announce their quarterly results are HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Axis Bank, Maruti Suzuki, Bajaj Auto, Hero MotoCorp, HCL Technologies, Tech Mahindra, and IndusInd Bank.
4. Macroeconomic data: The macroeconomic data will also be keenly watched by the market participants this week, as the government will release the second quarter GDP growth estimate on October 29. The consensus expectation is that the Indian economy grew by around 8 percent year-on-year in Q2FY24.
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5. IPO market: The IPO market will also witness some action this week, as four companies - Nykaa E-Retail (Rs 5,352 crore), Fino Payments Bank (Rs 1,200 crore), PB Fintech (Rs 5,700 crore), and SJS Enterprises (Rs 600 crore) - will launch their public issues between October 28 and November 1.
6. Technical indicators: The technical indicators suggest that the Nifty50 has formed a bullish flag pattern on the daily chart and is poised for a breakout above the resistance zone of 19,900-20,000. The index has also reclaimed its 21-day EMA and is trading above its 50-day EMA.
7. Key Support And Resistance Levels: The key support levels for the Nifty50 are placed at 19,867 and 19,783 (the pivot point), followed by 19,667 and 19,583 (the previous swing low). The key resistance levels are placed at 20,017 and 20,101 (the all-time high), followed by 20,221 and 20,305 (the upper end of the flag pattern).
8. Bank Nifty: The Bank Nifty has also formed a bullish flag pattern on the daily chart and is likely to resume its uptrend above the resistance zone of 44,500-44,700. The index has also bounced back from its 100-day EMA and is trading above its 200-day EMA.
9. Key support and resistance levels for Bank Nifty: The key support levels for the Bank Nifty are placed at 44,118 and 43,885 (the pivot point), followed by 43,552 and 43,319 (the previous swing low). The key resistance levels are placed at 44,651 and 45,184 (the upper end of the flag pattern), followed by 45,418 and 45,951 (the previous swing high).
10. Option Data: The option data indicates that the maximum open interest on the call side is at the 20,000 strike price, followed by the 20,500 strike price. On the put side, the maximum open interest is at the 19,500 strike price, followed by the 19,000 strike price. The option chain suggests a trading range of 19,500-20,500 for the Nifty50.
Trading strategy for Monday:
- Buy stocks that are expected to benefit from the positive market sentiment and the strong earnings season.
- Keep a stop loss in place to protect your profits.
- Be cautious of profit-booking at higher levels.
- Watch out for the key support and resistance levels.
Disclaimer: This is not financial advice and I am not a financial advisor. Please do your own research before making any investment decisions.