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Stock market recap: Benchmark equity indices — Sensex and Nifty — tumbled for the second day in a row on Friday, 31 October. Despite this, the indices clocked their best monthly gains in seven months since March.

Sensex fell 465.75 points or 0.55% to end at 83,938.71, while the Nifty 50 closed the session at 25,722, down 155.75 points or 0.60%. A cautious global sentiment and profit-taking amid mixed earnings drove the indices lower. For the month, the 30-pack Sensex gained 4.6% while its NSE counterpart, Nifty 50, rose 4.5%.

The broader markets witnessed a decline, as the BSE Midcap index tumbled 0.55% and the BSE Smallcap index lost 0.40%..

Indian equities ended lower on 31 October, with the Nifty 50 slipping 0.60% to 25,722.10, weighed down by broad-based sectoral weakness and muted global cues. Sensex also declined in tandem, as investors booked profits after recent highs. Market breadth remained negative, with 1,266 stocks advancing against 1,805 declines, indicating a clear tilt toward bears.

Among sectors, Nifty PSU Bank (+1.56%) was the sole notable gainer, supported by strong quarterly updates from select state-run lenders. In contrast, Financial Services (-0.72%), Consumer Durables (-0.74%), and IT (-0.54%) dragged the indices lower, reflecting caution ahead of key U.S. economic data and upcoming domestic macro releases. Broader markets underperformed, with Nifty Midcap and Smallcap indices falling around 0.7% each.

Nifty 50 is consolidating after a breakout above 25,400, facing resistance near 26,000–26,100, where a short-term double top has formed. Despite profit-taking, the broader uptrend stays intact as the index holds above all its key moving averages. Momentum indicators suggest cooling after an overbought phase. The RSI has eased to around 58, while the MACD remains positive but shows narrowing histograms, hinting at waning momentum. Immediate support lies at 25,700–25,500, with resistance at 26,100; a move beyond this range could define the next directional bias.

According to O'Neil’s methodology of market direction, the market status has shifted to a "Confirmed Uptrend" as it decisively surpassed its previous rally high of 25,670 to register a new 52-week.

The index halted its four-week winning streak, ending the week marginally higher near 25,700. On the technical front, Nifty now faces a crucial resistance zone between 26,000 and 26,300. A decisive breakout above this range could pave the way for new all-time highs. On the downside, immediate support is placed at 25,400, while a stronger base near 25,000 continues to underpin the broader uptrend. Overall, the market structure remains constructive as long as the index sustains above 25,400, a key breakout zone aligned with the downward-sloping trendline. Overall sentiment remained cautious amid subdued global risk appetite and mixed corporate earnings.

Bank Nifty opened weak and remained in negative territory throughout the session. The index formed its second consecutive bearish candle with a lower-high and lower-low on the daily chart, signaling short-term weakness. It opened at 57,942.45, touched a high of 58,254.95 and a low of 57,656.95, before closing at 57,776.35, down 0.44%. Despite the decline, the index still trades above all its key moving averages, indicating underlying strength. However, the formation pattern and recent price action suggest a cautious approach is warranted, with close monitoring of support levels and overall market sentiment.

The RSI has turned slightly downward and is now positioned at 62, indicating a mild loss of momentum and potential cooling in the recent rally. Although the MACD still holds a positive crossover above the central line, reflecting an overall bullish undertone, early signs of profit booking may weigh on the index in the coming sessions.

According to O’Neil’s methodology of market direction, Nifty Bank remains in a Confirmed Uptrend. However, the weakening momentum suggests traders should adopt a cautious stance, as short-term consolidation or a minor correction cannot be ruled out despite the broader bullish structure.

From a technical standpoint, immediate support lies near 57,000, with a stronger base around 56,900, aligning with the 21-DMA. However, recent profit booking may trigger further downside pressure in the coming days. A break below key support could accelerate weakness.

On the upside, only a sustained move above 58,550 may revive bullish momentum toward 60,000. While the broader structure remains positive, traders should stay cautious and watch for signs of selling pressure before initiating fresh long positions. Volatility is expected to rise, and risk management will be crucial in the near term.

MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.

Trade name: William O’Neil India Pvt. Ltd.

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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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