WHAT LIES AHEAD : NEAR-TERM PICTURE
Indian markets witnessed a strong recovery from the crucial support levels driven by robust macroeconomic numbers, offsetting the geopolitical tensions and weak domestic economic forecasts. After a day’s breather for profit-booking, markets yet again bounced back ahead of frontline corporate earnings reports, viz; TCS and IndusInd Bank. On October 12, bulls gave a strong comeback with both Nifty and Sensex gaining over one per cent. Going forward, markets are likely to witness volatility amid corporate earnings and announcements.
Apart from benchmark indices, broader markets too ended on a positive note. Small-cap outperformed benchmarks with 2.7 per cent gains, while Mid-cap closed in line with 1.7 per cent gains. IT and metal sectors remained the lead gainers during the period with 3 per cent plus gains each. All other sectors ended in the green. On October 12, market bias too remained strong with 1138 advances and 562 declines on the NSE while India VIX tumbled 5.8 per cent.
After registering low of 9,688, Nifty formed sequence of seven higher lows. However, on Wednesday, for the first time Nifty breached its sequence of higher low as day’s action formed a sizeable bear candle. But on Thursday, follow-up selling was missing and bulls bounced back strongly, resulting in formation of a sizeable bull candle. Moreover, Nifty managed to close above its stiff resistance of 10,070-10,075 which is 78.6% retracement level of its recent down leg, which started from the high of 10,179 to the low of 9688. Going forward, index may continue its upward momentum and could revisit its all-time high level of 10,179. On the flip side, immediate support is placed around the 10,070 level, followed by 10,040 and 9,990. The daily 14-period RSI is in rising trajectory and trading in bullish zone.