Indian Market Registers Biggest Weekly Gains in Four Years
Indian Markets staged a smart recovery as global cues were positive. As NIFTY and BSE Sensex are in positive zone now, traders can expect markets to remain positive in the coming week. Even if there is a small decline, there could be buying at lower levels. On the positive side, Indian currency also recovered. Forex experts feel that the worst could be over for the Indian currency and we can expect further rally in coming months.
Nifty posted biggest weekly gains since 2016 as Nifty rebounds almost 4.8% to close above 10500 marks. Nifty took an important support of 100 SMA on the weekly chart and rebound was accompanied with a drop in Volatility Index, a measure of fear and buying across was board was visible as Blue-chips rebounded along with Small-cap and Midcap.
The week was one of the best posted in the last few years as a lot of action was clearly visible. The buying at lower levels in blue-chips, Short covering in Index and Options and a pickup in momentum in crucial indices such as Small-cap and Mid Cap.
The global markets were positive and with a drop in Crude oil it further aided the sentiments for Indian equity markets. Technically the support was very much important at zones of 10000 - 10050. The placement of 100 Days MA was around those levels while now resistance is seen on the upside at 10700 - 10750 zones where it has its 50 Days MA. Having said that, a rebound from long-term MA establishes the fact that the underlying strong bullish trend while in short-term being below 50 Days SMA will add skeptical notion to it. A close above 10700 would further call in a short covering though it has to be on closing basis for two consecutive days.
For markets as we said, It will be global cues and any positive news or move from western markets will have an exponential factor for Domestic markets and the recent drop in crude is further keeping sentiments positive. IIP Numbers, Inflation are lined up and will be watched in the second week. The volume may remain Thin due to holidays in coming week on the occasion of Deepawali. We recommend being now cautious after this run up as a confirmation would come only above 10700 while it is best to book some profit in the short term while adding blue-chips for a longer term perspective.