Market Snapshot for November 4, 2024

The Indian stock market is expected to start the week on a cautious note, as global uncertainties loom ahead of pivotal economic events. Benchmark indices Sensex and Nifty 50 might see limited gains or a mild drop at opening, following cues from global markets. The Gift Nifty, a proxy for India’s Nifty, traded at a 70-point discount on Monday morning, indicating early signs of a tentative start.

Special Diwali Muhurat Rally
In a sign of resilience, Indian indices closed last Friday’s Diwali Muhurat trading session in the green, as the Sensex gained 335.06 points to settle at 79,724.12 and Nifty 50 rose by 99 points, ending at 24,304.35. But after a muted week with relatively small gains, analysts say the rally may face challenges in sustaining momentum.

Technical Analysis: Key Levels and Resistance
The Nifty 50 index, forming an "inside day" pattern, highlights limited movement within a consolidation range. Despite brief gains, the index has stayed below the critical 20- and 50-day Simple Moving Averages (SMAs), suggesting bearish signals, especially with these SMAs now placed around the 24,330-24,344 mark.

“After a muted week, stocks saw a modest recovery with more of them moving above short-term averages. However, broader market momentum is still in negative territory, signaling potential weakness in the days ahead,” explained Lovelesh Sharma, Consultant at SAS Online. “The resistance line at 24,500 could be critical; a failure to breach it might confirm the downtrend.”

Broader Implications for Investors: Bank Nifty Outlook
The Bank Nifty, often a key driver of market sentiment, mirrors Nifty’s cautious tone. With prices contracting in the 24,500-24,150 range, traders could see sideways movement, unless a major catalyst triggers a decisive break. A rally past 24,500 could propel the index towards 24,800, while a drop below 24,100 could expose further downside, testing lows near 23,800.

“The market is at a delicate juncture. Until a breakout materializes, it’s prudent to adopt a ‘sell-on-rise’ strategy,” says Palka Arora Chopra, Director of Master Capital Services Ltd.

Investor Strategy and Outlook
For investors, the focus will be on how the market handles the 24,500 resistance zone. A push beyond this level could act as a bullish trigger, but failure to maintain gains above this threshold might see stocks fall back to the lower end of the range. Experts advise patience, with key indicators pointing to a range-bound trading pattern in the coming sessions.