Strong resistance to Nifty at 12,000 points

K. Aravind

The stock market has performed well the past week. Even though the market faced strong selling pressure, last week saw a surge in sales. At the same time the volatility was strong. There were also days when the day’s trading varied by as much as 150 points.

Uncertainty in the US market is also reflected in the Indian market ahead of the US presidential election in November. The volatility will continue as global indications persist in this manner. Delay in approval of US stimulant package and increasing number of COVID-19 patients in Europe are adverse factors.

At the same time, the increase in the number of people being cured of COVID in India and the festive season are positive factors. The Diwali season is expected to be a good time for business. The companies’ quarterly results so far have also been better than expected.

Banks are the major contributors to the market. While banking stocks supported the market at a low level, they also faced selling pressure at a high level. The IT sector also supported the market. Automobile stocks also started gaining ground this week. Auto sales are expected to pick up in early November. Auto sales are expected to pick up during the Diwali season, which is expected to boost auto stocks. Shares of the consumer durables sector, which has the potential to sell well during the festive season, are also on the rise.

Last week too, the Nifty was seen coming down after touching the resistance level of 12,000 points. If this level is breached, the market is likely to rise to record levels. The next smallest resistance is at 12,200 points.

11,800 points is the key support level. The next support level is at 11,550 points. It is advisable for investors to be cautious the coming week as well. The market is expected to fluctuate sharply at any time due to uncertainty in global indicators.