Global markets are under pressure after US President Donald Trump tested positive for coronavirus, sparking risk-off sentiment. With the US election approaching, traders are watching out for 11,250, which according to technical analysts is a make-or-break level for the index as a drop below this level can take the index to 11,000 levels. On the higher side, technical analysts said 11,500- 11,600 would be a strong hurdle. ET spoke to four technical analysts for their outlook on the Nifty for the week ahead.
TECHNICAL ANALYST, SUSHIL FINANCE
As we head into October, we expect more of stockspecific actions with rangebound trade on the Nifty with bouts of volatility given the backdrop of the US Presidential Election. Level-wise, 11,490-11,500 is immediate target zone, above which opens up room for 11,590-11,600. On the downside, 11,290- 11,320 is the support zone. Stock-specific FMCG frontliners HUL and Nestle are good accumulation candidates at current levels for higher levels of 2,400 and 18,500, respectively. Among the banking counters, HDFC Bank and Axis Bank are looking good for higher levels of 490-500 and 1,190-1,250 levels, respectively. Bharti Airtel, Adani Ports, Eicher Motors are other good stocks for buying at current levels.
TECHNICAL RESEARCH ANALYST, HDFC SECURITIES
The market has shown an upside bounce last week and is not willing to give up its support. Buying is emerging at lower levels. 10,800 has acted as a strong support recently and the Nifty has witnessed a sharp upside bounce from the lows since then. If you look at weekly and monthly setup, the market is still in a dicey mode. On the upper levels, 11,500-11,600 is going to be strong resistance. After that, 11,800 is going to be a crucial resistance because last month we saw the formation of a bearish engulfing pattern at around 11,795 as per daily and weekly time frames. That pattern is still intact. There may be a 70-80 point gap down on Monday. The Nifty has support at around 11,250 and below that at 11,000-11,050.
HEAD – TECHNICALS & DERIVATIVES, AXIS SECURITIES
The outlook is cautious looking at the current scenario. The Nifty is likely to face resistance at 11,450-11,500. This is an important resistance area. On the lower side, 11,250 is critical. If it breaks below 11,250, then we may again see extended selling pressure. Either breakout or breakdown below these levels will decide further direction but looking at the global news flow, it is giving us a sense that the market may break the 11,250 level. Call writers are active at 11,500 strike, which is a resistance level for weekly and monthly options. The next one or two sessions will decide the market trend. If 11,450- 11,500 is not crossed in the next two sessions, the index can fall to 11,250. The range for the Nifty this week is 11,200-11,500.
HEAD – TECHNICALS, ICICI SECURITIES
This week, we expect the index to consolidate in the broad range of 11,100-11,500 amidst stock-specific actions as the earnings season starts. The index holding above 11,100, despite elevated global volatility, will help it form a higher base and make price structure further robust. We believe that relative outperformance of the broader markets would extend as they have staged a strong comeback after forming a higher base above the 50-day exponential moving average. Currently, average 65 per cent stocks of Nifty Midcap and Smallcap indices are above their 200-day simple moving averages compared to last week’s reading of around 55 per cent; this bodes well for durability of the ongoing up-move.