StockEdge's Morning Market Update - 5th Nov
The Nifty lost 309 points over the day to close at 23,995. After the festive week, markets opened flat and slipped, making a new weekly low and breaking the range of the last 4–6 trading sessions. The session opened with a gap-down, with declines continuing in the first half, followed by a slight bounce. The IT, PSU banks, and Bank Nifty sectors outperformed, while real estate and the PSE index were top losers. The advance-decline ratio heavily favored bears, and the broader market breadth was overall bearish. For more details on market breadth, visit web.stockedge.com.
The Dollar Index remains near 104, and India VIX has risen to around 17.
Technically, the index has tested August’s swing lows and saw a minor bounce. Notably, despite the lower low in prices, the RSI indicator held above its recent low, and the stochastic indicators have formed a higher bottom. The market breadth and all momentum indicators are oversold. Key support includes a trendline from COVID lows and the 200 EMA around 23,500. With this technical setup and the upcoming U.S. election event, the 23,500–24,000 zone may mark a bottom. Head and shoulders pattern targets and Fibonacci levels align within this range, suggesting proximity to a bottom, pending price confirmation. Major resistance lies around 24,400–24,500.
In sectors, Bank Nifty has shown significant outperformance, with PSU banks appearing strong in the current setup. Focus on sector leaders for opportunities.
To conclude, the downside appears limited from current levels. The next 3–4 trading sessions this week may clarify market direction.
Nifty
Bank Nifty
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