Nifty Poised At Critical 8700, F&O October Expiry Week Begins

Indian Market Outlook: Indian benchmark Index Nifty closed on a positive note last week. After a negative start the Index recovered sharply on Tuesday, 18th October even as it traded above 8700 levels. In the past two trading sessions, the Index remained stable and traded in a range between 8650-8720.The major resistance levels remains at Nifty's week one and week two high. For Nifty spot 8727 & 8745 are the crucial areas. Breakout above these levels will push the target to 8806. This is also the 3 week high of the Index.

The October series has seen selling by FII in the cash markets as well as in Futures and options segment. DII's have been buying in the cash markets which leaves the market participants confused as to where will the markets close for this settlement. The broader markets are in a buy trend with CNX Small Cap Index making life time high in the last trading sessions and closed at 6447.Banking stocks were gainers with ICICI bank gaining above Rs.37 in the previous week, jump of 14% and this stock was the top gainer in Nifty as well as Bank Nifty.

Nifty support stands at 8640-8650 and as Nifty stays above these levels the bulls will have control and one can see higher levels for this settlement provided the Global markets lend support.

Earning seasons will be in full flow as Axis Bank, Kotak Mahindra Bank, HDFC Bank and ITC announce their earnings this week, which might lead to volatility in the short term.

Nifty Futures is expected to open at 8700 as per SGX Nifty at 8:30 am IST, which is 9 points below its previous close of 8709.

Open Interest Index F&O and Cash Segment Activity

In cash segment, last trading day, FII have sold shares worth Rs. 373 Cr and DII bought shares worth Rs. 500 Cr. A combined buy of Rs. 227 Cr. For this expiry, FII and DII together are buyers worth Rs. 2699 Cr.

In Index Options, last trading day, FII have sold 9314 contracts, below its 1 year average of 18280 contracts. Pro have sold 1134 contracts, below its 1 year average of 27670 contracts. Combined there has been a net sell of 10448 contracts, below its 1 year average of 39000 contracts. For the current expiry, FII and Pro combined are net sellers of 12459 contracts.

In Index Futures, last trading day, FII have bought 872 contracts, below its 1 year average of 9706 contracts. Pro have sold 1282 contracts, below its 1 year average of 4903 contracts. Combined there has been a net sell of 410 contracts below its 1 year average of 9401 contracts. For the current expiry, FII and Pro combined are net sellers of 103276 contracts.

International Market Morning Update:

Internationals markets ended last week on a positive note with US Indices S&P futures ending last week at 2136 after making a high of 2144. Low volatility was witnessed in the past few trading sessions as market participants are digesting next US interest rate hike news and views from FED governors and officials in light of US Presidential elections scheduled on November 8, 2016.The big monthly support of 2107 is a short and medium term trend changing level and till S&P futures trades above the level it is a buy.

European Indices outperformed the US indices as ECB Chief Mario Draghi gave hope of a possible stimulus in December meeting. This has led to Euro weakness against the US dollar which is likely to boost their exports. This was reflected on the German Dax which closed at 10707, up 180 points for the week.

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Research Team - Tel: 033-30010001, write to us at clientsupport@dynamiclevels.com to give feedback. Website:www.dynamiclevels.com

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