Bank Nifty fell early on profit booking but saw buying near prior session low by ICICI Direct
Nifty :25145
Technical Outlook
Day that was…
Equity benchmarks closed the second consecutive session on a negative note tracking weak Asian cues and INR weakness. The Nifty settled at 25145 down 0.32%. Market breadth was weak and in favor of declines, with an A/D ratio of 1:3 where broader markets underperformed the benchmark. Both midcap and small cap indices underperformed the benchmark and closed on a negative note, 0.75% and 0.89% respectively. Sectorally, all indices closed in red, where PSU Bank, Consumer Durable and Metal underperformed.
Technical Outlook:
* Nifty started the day on a positive note; however, profit booking emerged in the vicinity of Friday’s sessions high, making lower-highlow throughout the session and closed below two sessions low. As a result, the daily price action formed a bearish engulfing candle indicating, breather after 743 points of up move.
* Key point to highlight is that, index is consolidating near upper band of one-year falling trendline (25300) while absorbing host of negative news like tariff concerns, quarterly earnings, therefore, a decisive close above it would confirm pause in downward momentum which will indicate the structural change that will help Nifty to gradually head towards short term milestone of 25800 with elevated support at 24700 which is 80% retracement of the current upmove. Our positive bias is further validated by following observations:
* The faster pace of retracement in Bank Nifty helped index to resolve out of 2 months high. The banking internals like private banks, PSU Banks, NBFC’s are showing structural improvement that makes us believe, Bank Nifty is gearing up to challenge it’s All Time high of 57600 in coming months.
* Structurally, Index staged a strong rebound after approaching maturity of price and time wise correction. Further, seasonality favours bulls in October month that would pave the way for Nifty challenging All Time high of 26300 by the year end.
* Market breadth witnessed month-on-month improvement on the ratio chart as rising ratio chart of stocks making new 52 weeks high vs new 52 weeks low (Universe: Nifty) signifies broadening of rally.
* Key Monitorable for the next week: a. Beginning of Q2FY26 earning season b. Development on tariff negotiations c. Gold: With > 50% up move in this year the monthly RSI has surpassed 90 levels for the first time since 1980. Such overbought conditions suggest possibility of short-term breather wherein Gold can consolidate in $4100-$3700 range
Nifty Bank : 56496
Technical Outlook
Day that was:
Bank Nifty closed the session on a negative note to settled at 56496 down 0.23%, indicating a temporary pause following the recent sharp upward momentum. The Nifty Private Bank index has mirrored the benchmark, ending the day at 27,695 down 0.34%
Technical Outlook:
* Bank Nifty started the session on a weak note and witnessed profit booking during the initial half, however buying demand emerged in the latter part near the previous session low. As a result, the daily price action has formed a bear candle, indicating consolidation in near term.
* Index continues to exhibit strength as it sustain above its key moving averages and its previous gap-up support zone near 55,700, indicating resilience amid prevailing global uncertainties. Key point to note is that post 2500 point rally, Index is currently consolidating in the 600 points range, indicating breather after recent up move. A decisive breakout above this level would signal resumption of the uptrend and open the door for a move towards the all-time high of 57,600 in coming months. Therefore, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 54,600, representing the 80% retracement of the ongoing up move (54,226-56,164).
* Structurally, over the past two decades, there have been 17 instances where Bank Nifty, following a decisive breakout above its previous two-month high, has delivered double-digit returns within the subsequent four months while surpassing its prior alltime high. In the current scenario, with the index decisively breaking out above its previous two-month high, a similar structural rhythm appears to be unfolding, indicating a high probability of achieving double-digit returns and surpassing the all-time high of 57,600 in the coming months.
* PSU Bank Index has underperformed the benchmark and closed on a negative note. Index has witnessed profit booking following the recent sharp upward momentum, indicating temporary pause. Therefore, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 7,225, which aligns wit
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