Week Ahead....

The selling pressure intensified again, driving the benchmark indices down by more than 2 percent in the week ended October 25 as ongoing geopolitical tensions, muted September quarter earnings with tepid demand environment and margin pressure, and significant FIIs outflow dented sentiment.

The BSE Sensex closed below psychological 80,000 mark, down 2.24 percent during the week at 79,402, while the Nifty 50 plunged 2.7 percent or 673 points to 24,181 (the lowest level since the week ended June 28), taking the total loss to 8 percent from its record high of September 27.

In the (Diwali) week ahead starting from October 28, the sentiment is expected to remain in favour of bears with focus on corporate earnings, and bunch of US economic data, while the market participants maintained caution ahead of US presidential elections scheduled on November 5.

Technically, the benchmark Nifty 50 is looking weak with the index achieving its (first) target of right shoulder of Head and Shoulders' pattern and decisively breaking below 100-day EMA (Exponential Moving Average) with above average volumes on last Friday. The index formed long bearish candlestick pattern on the weekly charts with continuation of fall and lower highs-lower lows formation for fourth consecutive week. Hence, most experts believe that the index on the downside may target August low (23,894) soon, followed by 200-day EMA (23,455). Even if there is a bounce considering the oscillator at oversold levels, that is unlikely to sustain given the 'sell on rally' market and weakening overall sentiment.

The monthly options data also suggested that the 24,000 is likely to be immediate support with 23,000 being the crucial support for the Nifty 50 in upcoming sessions, however, the hurdle on higher side is seen at 24,500.