Indian Stock Market Rallies Amid Strong PSU Bank Earnings and Easing Oil Prices; Traders Eye Key Levels Ahead of U.S. Elections

The Indian stock market displayed a positive trend this week, driven by strong Q2 performances from PSU banks and a decline in oil prices amid easing geopolitical tensions in the Middle East. This boosted market sentiment, leading to a recovery in the benchmark indices, which closed the week on an upward trajectory. The India Volatility Index (India VIX), which measures market volatility expectations for the Nifty 50 index, rose by 8.68%, ending the week at 15.90. Key contributors to this bullish sentiment included robust quarterly results from major players such as ICICI Bank, Sun Pharma, Federal Bank, and L&T.

Nifty Outlook

The Nifty concluded the week with modest gains, forming an inside candle pattern on the weekly charts. Key resistance is observed at 24,500; a breakout above this level could trigger a rally towards 24,800. Conversely, if the index drops below 24,100, it might face increased selling pressure, potentially testing the 23,800 level. Market conditions suggest a cautious stance, with a strategy of selling on any rise until a definitive breakout above resistance confirms a bullish reversal. Traders should focus on these critical levels while maintaining vigilant risk management amid ongoing market volatility.

Bank Nifty Outlook

The Bank Nifty displayed strength this week, closing with a 1.75% gain and finding support near the 51,000 level. A breakdown below this support could lead to heightened selling pressure, potentially pulling the index down towards 50,500. On the upside, buying interest is expected to emerge only if it surpasses 51,800, which could take the index to around 52,300. Until then, the market is likely to remain range-bound between 51,000 and 52,300. Traders are advised to adopt a “sell on rise” approach, focusing on shorting near resistance levels, while staying alert for any breakout or breakdown that could indicate further directional movement.

Stocks to Watch

• Tata Power (TATAPOWER): Recommended for buying at ₹445.45, with a stop-loss set at ₹430 and a target price of ₹477. The stock has recently rebounded from its support zone, suggesting a bullish reversal. Increased trading volumes further support a positive outlook, and if it maintains above ₹451, it is likely to continue its upward momentum.
• Laurus Labs (LAURUSLABS): Suggested for purchase at ₹499.80, with a stop-loss at ₹482 and a target of ₹535. The stock is characterized by a consistent pattern of higher highs and higher lows, indicating a clear upward trend. A sustained close above the critical resistance level of ₹505 could trigger further upside momentum.

As the market approaches the U.S. presidential election on November 5, key macroeconomic data will be vital in shaping the market’s outlook. Traders should remain vigilant regarding significant levels that could signal further movements in the indices, employing sound risk management strategies to navigate potential market fluctuations.

Disclaimer: This summary is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. The performance of stocks and markets can be volatile and past performance is not indicative of future results.