The market may remain volatile amid the Q2 earnings season and ahead of the October F&O expiry.  Nifty and Sensex witnessed profit booking after hitting their fresh all-time high of 18604 and 62245 respectively however Bank Nifty is in a different mood and continuing its bullish momentum with a new all-time high of 40587. There is a sectorial rotation visible where some money is moving from stock with expensive valuations towards banking names as there is a comfort of valuation and strong earnings. FMCG sector was the biggest dragger last week with a cut of more than 6 percent after earnings disappointment with HUL and Asian Paints.

If we talk about the data then both FIIs and DIIs are in a selling mode. FIIs sold worth Rs7350 crore and DIIs sold worth Rs.4505 crore in the cash market last week. FIIs' long exposure in the index future stands at 62% while PCR is sitting at the 0.82 mark which is an oversold territory and that may lead to a short-covering bounce in the market.

Technically, Nifty formed a dark cloud cover candlestick formation on the weekly chart which is a sign of a short-term reversal but we have to wait for follow-up for confirmation. On the daily chart, it is trading near the critical support zone of 18000-17950 zone where we can expect a bounce back. On the upside, 18250-18300 will be the immediate supply zone while 18400-18450 will be the next resistance zone. If Nifty slips below the 17950 level then there is a risk of any meaningful correction where 17600 will be the next important support level.

Bank Nifty is outperforming however 40500 is an important hurdle because it coincides with upsloping trendline resistance on the monthly chart where we could see some profit booking but if it manages to sustain above this level then we can expect a further rally towards 41000/41500 levels. On the downside, 39500-39300 is an immediate and strong support zone, below this, 38800-38500 will be the next important support area.

If we talk about the cues for the next week then the next batch of earnings season and October month F&O expiry may cause volatility in the market. The market will react to earnings of Reliance Industries and ICICI Bank on Monday while Tech Mahindra, Ambuja Cement, Axis Bank, Bajaj Finance, Cipla, Kotak Bank, Adani Ports, L&T, Bajaj Auto, ITC, IndusInd Bank, Maruti Suzuki, SBI life insurance, Titan, DLF, IndiGo, Tata Power, Dr Reddy, Gail, Vedanta, etc will come out with their earnings during the week.

The primary market will again become active as Nykaa's IPO is opening on 28th October. If we discuss other important cues then Institutional investors' behavior will be important because they are selling continuously for the last few days. Globally, prices of crude oil continue to rise which is a concern for a market like India furthermore rising US bond yields may also disturb the mood of the global equity market.