Week Ahead

The BSE Sensex gained 167 points at 65,996, and the Nifty50 rose 15 points to 19,654, while the Nifty Midcap 100 index lost 0.6 percent and Smallcap 100 index climbed 0.7 percent during the week. Auto, banks, energy, pharma, oil & gas stocks were under pressure, whereas technology, and realty stocks trended higher.

The market snapped two-week losing streak and closed moderately higher for the week ended October 6 after showing smart recovery from weekly low, may be partly due to oversold conditions. The recovery may continue in the coming week too, but volatility can't be ruled out with more stock specific action given the beginning of September quarter earnings season.

The corporate earnings season for the July-September period FY24 will be kicked off by IT majors next week, with TCS releasing scorecard on October 11.

Apart from earnings, the market participants will keep an eye on CPI inflation for September releasing on October 12. The CPI inflation, an important data point for the MPC, is expected to cool down further due to falling vegetable prices and cut in LPG price.

Technically Nifty50 rebounded nicely after defending 19,300 mark and snapped two-week losing streak. The index has formed small bodied bullish candlestick pattern with long lower shadow and minor upper shadow on the weekly charts which resembles Hammer sort of candlestick pattern at the downtrend, which is a bullish reversal pattern. This raised hopes for northward journey in coming sessions, which if comes true in following trade then 19,800-20,000 can't be ruled out with crucial support at 19,600-19,300 area.

The Options data also indicates that the Nifty may face strong resistance at 19,900-20,000 levels, with crucial support at 19,600-19,500 levels.