Indian Stock Market Faces Downturn as Nifty and Sensex Decline on October 30, 2023

The Indian stock market experienced a downturn on October 30, with selling pressure persisting throughout the day. The Nifty index dropped by 176.05 points, or 0.68%, closing at 25,877.85. Similarly, the Sensex declined by 592.67 points, or 0.70%, ending the session at 84,404.46. Meanwhile, market volatility saw a slight uptick as the India VIX increased by 0.79% to reach 12.07.

Technical analysts from Bajaj Broking noted that the Nifty index formed a bearish candlestick pattern, indicating profit booking near higher levels around 26,100. Over the past six sessions, Nifty has been consolidating within a range of 26,100 to 25,700. This consolidation phase is expected to continue as part of a healthy retracement following a significant upward move of 1,500 points in the last four weeks.

Analysts suggest that a breakout above 26,100 could propel Nifty towards its previous all-time high of 26,277 and potentially to 26,500 in the near term. The broader market trend remains bullish, with strong support anticipated around the 25,700-25,500 range, marking the recent breakout zone.

Regarding Bank Nifty, analysts observed a small bearish candle formation as it ended its three-session upward streak due to profit booking at higher levels. A decisive move above last week's high of 58,577 would confirm a breakout continuation towards targets of 59,000 and 59,300.

If Bank Nifty fails to surpass this level, it may experience range-bound movement between 58,600 and 57,300 in the short term. Immediate support is identified around 57,300-57,500, aligning with the previous breakout zone. A stronger support base lies near 56,800-56,500.

On October 31, Mehta Equities Ltd's technical analyst Riyank Arora recommended two stocks for buying: HUDCO and ITC Hotels.

HUDCO is currently trading in an uptrend with consistent higher highs and lows. The stock is above all key moving averages, indicating strong technical support. A breakout above ₹242 could lead to further gains towards ₹255 and ₹265. Traders are advised to accumulate on dips with a stop-loss at ₹230.

ITC Hotels has shown positive momentum after bouncing from its short-term moving average support. The stock displays a strong reversal pattern with rising volume, suggesting accumulation at current levels. Sustaining above ₹218 could push it towards ₹230 and ₹240 soon. A stop-loss at ₹210 is recommended for risk management.

The outlook for both Nifty and Bank Nifty remains positive despite recent consolidations and profit bookings. Analysts view any pullbacks as buying opportunities within identified support areas for both indices.

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