Nifty 50 Prediction for the Week: Nifty, Sensex hold above their crucial support

Nifty 50 and Sensex have snapped their eight-week fall. Both the indices managed to witness some recovery and close the week higher by 0.44 per cent and 0.78 per cent respectively. Nifty Bank index on the other hand was up 1.48 per cent last week after having fallen for six consecutive weeks.

On the charts, the benchmark indices are holding very well above their crucial support in spite of high volatility. That keeps alive the chances of seeing a good recovery in the coming weeks. The danger is only if the indices break below their key support.

The Foreign Portfolio Investors (FPIs) continue to sell heavily. The equity segment saw a net outflow of $3.6 billion last week. With this, the total outflow in the equities for the month of October stands at $4.58 billion. Continuous selling from the FPIs can keep the benchmark indices subdued.

Short-term outlook: The support at 22,100 is holding well for now. As long as the Nifty stays above this support, a rise to 22,800-23,000 is possible from here. Failure to breach 23,000 can drag the index down to 22,100 again.

A strong break above 23,000 will ease the downside pressure. Such a break can take the Nifty higher to 23,200, 23,600 and even 24,000 in the short term.

The danger is only if the Nifty breaks below 22,100. If that happens, we can see the index declining to 20,500.

Medium-term view: For now, the broad 22,000-26,500 range is intact. The rise to 24,000 mentioned above will keep the upside open to see 26,500 over the medium term.

We are continuing to retain our long-term bullish view. We expect the Nifty to breach 26,500 in the coming months and go up to 28,000 and 30,000 in the long term.

The break below 21,800 and the fall to 20,500 will be an initial sign to indicate that our bullish view is going wrong.

Short-term view: The index sustained higher and stable above 54,350 all through the week. Immediate resistance is at 55,600. A break above it can take the Nifty Bank index higher to 57,000-57,500. Failure to break 55,600 can drag the index down to 54,350-54,000 again.

The level of 53,800 is a crucial support to watch. The index will come under more selling pressure if it breaks below this support. Such a break can drag the Nifty Bank index down to 51,000 in the coming weeks.

Medium-term view: The level of 51,000 is a strong support which can limit the downside. As long as the index sustains above 51,000, there is no major change in our long-term bullish view. We reiterate that 65,000 and 68,000-69,000 can be seen on the upside in the long term. A sustained rise above 61,000 will clear the way for this rally.