Week Ahead....

In the week ended October 7, the Sensex rallied 764 points to 58,191 and the Nifty rose 220 points to 17,315. The broader market outperformed the benchmark, as the Nifty midcap 100 index was up 2.4 percent and smallcap 100 index 2.6 percent.

The coming week is expected to be eventful with the earning season taking off in earnest. As participants will also keep a watch on macroeconomic data and the US inflation numbers, the market will likely be volatile.

The recovery in the global indices, especially the US, has triggered the recent rebound but the lack of sustainability in the move is causing excessive volatility. However, we feel domestic factors like earnings and macroeconomic data may take the front seat and dictate the trend ahead.

Technically Nifty has managed to hold on to the psychologically vital 17,000 mark in October, forming a small-bodied bullish candle on the daily charts on October 7 and a bullish candlestick on the weekly scale. The level will act as a crucial support and holding it can take the Nifty towards 17,500-18,000 in the coming days, though volatility can't be ruled out. We see 16,750-16,800 as the next crucial support zone, a break of which can lead to a sharp correction.