Market Next Week: Nifty & Bank Nifty View and Sectors to Watch
Nifty 50 is expected to defend 17250 support levels and sustained and may consolidate from here. The further downfall or correction may only come when it breaks and goes below these levels. 17800-17900 will remain a zone of resistance for some time now and it certainly looks stretched. So, the market outlook for the next week starting from October 4 is cautiously negative. If the market ends up at closing lower than the last close. It will warrant caution.
Careful observation shows that media, private banks, PSE, auto are still in the lagging quadrant, but they are fast improving their relative positions against the Nifty 500 index.
They can be more resilient performance. Metals and commodities are in a weak quadrant compared to the broader market index. Nifty Energy and Bank Nifty are in the improving quadrant.
Nifty Financial Services is also under the improving quadrant. IT and realty index are still in the leading quadrant.
What Should Be Your Investment Strategy Now
Also, it’s not the stage where you can be bullish. These are the levels when you should tread cautiously. Investors should focus on Nifty Bank, Pharma, Auto, Realty, FMCG and stay away from metals, IT.
If you are planning to put serious money, better hold and adopt a staggered approach. Many beaten down sectors so far give a margin of safety and in the case of serious sudden fall provide a cushion or margin of safety.
Also, earning season will kick in in the next week and any weakness in the performance of stocks that have run up so fast will spook the market.
If Reliance and few other high weight stocks don’t correct, Nifty may not fall much. In all probability, a meaningful direction will only emerge after the earning season.
Technical Outlook Bank Nifty
Compared to Nifty, Bank Nifty still has room up to move to 40,000 levels as it has not performed that strongly compared to Nifty. Kotak, HDFC Bank, ICICI Bank, all frontline stocks are looking well on charts.