For the weekend 04th Nov'21-Thursday... Updated on 31.10.21, Sunday-8.10 pm

Last week Nifty trend: Nifty Index last week, opened on a positive note, i.e., 18229.50 on Monday, it moved down till 17968.50 on Tuesday, the pull back rally lifted the index and made weekly high 18342.05 on Wednesday; thereafter, the Index moved down rest of the week, made a weekly low 17613.10 on Friday and closed the week at 17671.65 on a negative note with a weekly loss 443.25 points, i.e., -2.45%. 

Sector wise performance: Last week, almost all the major sectoral indices were closed with a negative note, barring Nifty Health; on the negative side, the Nifty Energy Index leading with a weekly loss -4.30%, followed by the Nifty Bank lost -3%, Nifty IT lost -2.79%, Nifty Financial Services lost -2.64%, Nifty Realty lost -2.33%, Nifty Metal lost -2.23%, Nifty Infra lost -1.87%, Nifty FMCG lost -1.68%, Nifty Auto lost -1.19%, finally Nifty Pharma lost marginally by -0.50%. On the other hand, the Nifty Health Index closed with a marginal weekly gain 0.21%. Likewise, Nifty Midcap Index closed on a negative note with a weekly loss -1.97% as well as, the Nifty Smallcap Index also, closed on a negative note  with a weekly loss -1.88%. 

Institutional Investors trading data: The Foreign Institutional Investors-FII's last week, continued as a net seller in the Equity segment, this week they sold to the tune of Rs.15702.26 crore on the net basis; but, the Domestic Institutional Investors-DII's turned as a net buyer, they bought to the tune of Rs.9427.23 crore on the net basis, as per the data forwarded to the SEBI, we must watch the FIIs/FPIs behaviour this week, whether they continue the funds outflow or not.

USD vs INR: The USD Vs INR opened near $74.90, made a weekly high $75.17 on the opening move; thereafter, it moved down and made a weekly low $74.74 on Friday and closed the week with a negative note at $74.92. This week, the USD vs INR should take support at $74.74-74.68, if moves above and sustain above $74.99 then, the USD may re-test $75.06-75.12-75.17-75.23-75.28-75.33-75.38-75-45 levels. On the other hand, if the USD moves below $74.68-74.60 then, it may re-visit $74.57-74.45-74.34-74.27-74.18-74.07 levels in the near term. 

Key Events: No major key events are expected this week on the global front as well as, on the domestic front except PMI manufacturing and Services data and Q2 (Jul-Sep'21) corporate earnings this week, already major top Nifty50 companies announced their Q2 numbers.

Q2-(Jul-Sep'2021) Earnings: The India Inc. Q2(Jul-Sep'21) corporate results, so far 898 out of 4248 companies were declared their Q2 results, on a QoQ basis the Net profit has been maintaining on the positive zone by 20.20% when compared with last quarter, i.e., the Net Profit of these 898 companies were at Rs.139,907.90 crore, as against in the Q1 (Apr-Jun'21) the Net profit seen Rs.116,443 crore. On the other hand, on a YoY basis, the Net profit seen positive growth about 25%, last year these 898 companies made a Net profit Rs.111,954.50 crore. This week, Tata Motors, HDFC Ltd, IRCTC, Bajaj Consumer, Sun Pharma, Jindal Steel, HPCL, SBI, Bharti Airtel and other midcap/small cap companies are expected to declare their Q2 results.

Covid19: The Covid-19 has continuously been witnessed a downtrend, as of today the country seen everyday covid positive around 12-15k, the number of active cases now at 159,272 the death toll rose to 458,186, the daily death rate is between 450-500 in a day. As on date the total vaccination status stood around 106.14 crore on that, the first dose numbers are 73.16 crore and second dose 32.98 crore. 

Crude Oil: Crude Oil price has moved up from $80 to $84.20 per barrel with upward bias and hovering near $84, the domestic Petrol & Diesel prices continued to move up and sell above Rs.107-110 mark and Diesel price is also moved up above Rs.100-105;, since the International Crude price hovering near $84 and USD Vs.INR is also hovering around $74-75, hence, the oil marketing companies continue to rise the Petrol and Diesel prices.

Price Earnings: The price valuation i.e, Price Earnings ratio-PE, has come down from the last week levels, i.e., 27.48 times and  settled on Friday at 25.71 times, the profit booking cum sell-off across the segment dragged the Nifty Index near 17600, since the PE also has come down till 25.71.

Advance & Decline (ADR) Ratio & Average Daily Volume(ADV): Market breadth, in the overall NSE listed stocks, last week seen in a negative zone, out of 2113 stocks were traded daily on an average basis, 4348 stocks advanced and 5880 stocks declined, the ADR maintained 0.74 times; also, the Nifty50 stocks ADR has seen in a negative zone at 0.63 times with 97 advances and 153 declines, this data infers that, the profit booking seen in the Nifty50 stocks and NSE listed stocks. At the same time the Nifty Bank Index ADR is also seen drop at 0.54 times with 21 advances & 39 declines.

F&O Cues & PCR (Put/Call Ratio): The Nifty future was settled at a premium 43.65 points from the last week premium level 29.65 points, the Nifty Futures Open Interest-OI as of Friday at 10743700 i.e.,214874 contracts, when compared with the last week levels 9998400 i.e., 199896 contracts. The PCR(Put/Call Ratio) has gone up to 0.91, from the last week level, i.e., 0.86, the maximum open interest seen in 17700 PUT and CALL options, it indicates the Nifty may trade with consolidation mode between 17600-18000 levels, further weakness only below 17600 levels, likewise any further up move is possible only if, the index moves and close above 18000 levels, this week.

This week Nifty Trend: Nifty Index as written and expected  last week, the technical correction dragged the Nifty Index till our threshold support levels, i.e., 17620, made a weekly low on Friday 17613.10 and closed well below 17700 levels. By considering the above mentioned micro, macro data and other factors I, conclude the weekly outlook that, the Nifty Index on Monday may open on a positive note to test 17700-17785 subject to the Asian indices movement if, moves above 17785 then, the pull back rally lift the Index to test 17840-17950-18000 levels, further up move above 18k, may take the Index to re-test 18130-18350 levels this week. On the other hand, if the Index unable to trade above 17785-18000 levels and moves below 17685-17610 levels then, the weakness may drag the Index till 17580-17455-17425 levels further, sell-off below 17425 then, the Index may re-visit 17330-17240-17000 levels in the near term. We can expect a pull back rally this week for 2-3 trading sessions with broad based consolidation between 17500-18300 levels, hence avoid aggressive short position, the India Inc. Q2 remaining results, International Crude Oil price and Global cues may drive the Nifty index this week and can expect a high intraday volatility due to Diwali holiday and Long week-end.

This week Nifty Bank Trend: Last week Nifty Bank made an all time high 41829.60, further it witnessed a sell-off till 38426.65 and closed 39116.60, this week the good support seen 38300-38100-37700-37500 levels and resistance seen 39300-39475-39730-39900-40120 levels.

Trading Strategy: The Investor/trader those who booked profit, try to invest in the Nifty50 stocks, especially in Nifty FMCG & Nifty IT stocks, around 17700-17400 levels with a short term perspective to gain 5-10%. Stocks to watch this week for a pull back HDFC Bank, Axis Bank, Hindustan Uniliver, ITC and Infosys.

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