WMA – Weekly Market Analysis | “Bank Nifty Again in Limelight” Analysis Report For 23 to 27 Oct 2023

Weekly Market Update: Nifty Analysis and Outlook

Hello, everyone! Welcome to the weekly market update session of DIP Institute. I am your host, Mohammad Safe. Today, we will discuss the performance of the market in the last week and the outlook for the upcoming week. Let’s begin by analyzing the daily chart of Nifty.

The Nifty closed above 19,542.50 in the last session, which was the resistance level we discussed in the previous week. We also talked about the support level at 19,500. Now, let’s move on to the weekly chart of Nifty. I will zoom in for better visibility.

On the weekly chart, I have marked the highs and lows of the past few weeks. The green and pink lines represent the highs, while the grey, green, and blue lines represent the lows. These levels are critical and can act as resistance or support for the market. The level around 20,200 is the all-time high for Nifty, while the level around 19,500 can act as strong support.

Looking at the weekly chart, we can see that Nifty has formed a double top pattern with a head and shoulders pattern. This indicates that if the market breaks below the support level of 19,500, it may experience a significant downward movement. On the other hand, if the market crosses the resistance level of 20,200, it may indicate a bullish trend.

Bank Nifty Analysis and Outlook

Now, let’s move on to the daily chart of Bank Nifty. As you can see, Bank Nifty has formed a double top pattern with a head and shoulders pattern as well. The left shoulder and head are visible, and the right shoulder is currently forming. This pattern suggests that if Bank Nifty breaks below the support level, it may experience a significant downward movement.

However, we need to wait for confirmation as the current candle has not closed below the support level. The levels to watch for Bank Nifty are 43,800 as resistance and 43,500 as support. The market is currently in a range-bound phase, and trading range-bound markets can also be profitable if you play it right.

International Market Analysis

Let’s take a look at the Dow Jones Industrial Average (DJIA) in the international market. Similar to Nifty and Bank Nifty, DJIA has formed a head and shoulders pattern, indicating a possible distribution phase. However, we need to wait for confirmation as the price is currently under construction.

Similarly, the European markets, including the FTSE, CAC, and DAX, are also trading below their 200-day moving averages, indicating a bearish trend. We need to keep an eye on these markets as they can have an impact on our domestic market as well.

Sector-wise Performance

Now, let’s discuss the performance of different sectors. The auto sector has been performing exceptionally well and has been the leading sector in terms of returns. On the other hand, the pharma, IT, banking, FMCG, and metal sectors have shown negative performance.

It is important to note that the market breadth is not very strong, indicating a lack of overall market strength. However, the auto sector has been an exception and has shown positive momentum. We need to keep an eye on the upcoming days to see how the market behaves and whether the current trend continues.

Stock Analysis

Now, let’s analyze some specific stocks that our team has been tracking. Please note that these stocks are for informational purposes only, and it is essential to conduct your own research before making any investment decisions.

Tata Consultancy Services (TCS)

TCS has formed a bullish engulfing pattern in the last session, indicating a potential reversal. The stock is currently trading near its 200-day moving average, which is acting as resistance. If TCS breaks out above this level, it may continue its upward movement. However, we need to wait for confirmation before taking any action.

Dr. Reddy’s Laboratories

Dr. Reddy’s Laboratories is currently consolidating between the levels of 5,700 and 5,800. If the stock breaks out above 5,800, it may indicate a continuation of the bullish trend. However, we need to wait for confirmation before making any trading decisions.

Maruti Suzuki

Maruti Suzuki has shown a significant breakout above the level of 6,300. The stock has been performing well and may continue its upward movement. However, it is essential to monitor the stock closely and set proper stop losses to manage risk.

Frequently Asked Questions

1. What is the outlook for Nifty in the upcoming week?

The outlook for Nifty in the upcoming week is uncertain. The market is currently in a range-bound phase, and we need to wait for a breakout or breakdown to determine the next direction.

2. Which sectors have shown positive performance?

The auto sector has shown positive performance, while the pharma, IT, banking, FMCG, and metal sectors have shown negative performance.

3. What are the levels to watch for Tata Motors?

The levels to watch for Tata Motors are around 570 and 600. A breakout above 600 may indicate a bullish trend.

4. Is it a good time to invest in the stock market?

Investing in the stock market requires careful analysis and consideration of various factors. It is essential to conduct thorough research and consult with a financial advisor before making any investment decisions.

5. What is the performance of gold and silver?