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Nifty :25227

Technical Outlook

Day that was…

Equity benchmarks closed on a negative note tracking weak global cues. The Nifty settled at 25227 down 0.23%. Market breadth was in favor of declines, with an A/D ratio of 1:2 where broader markets underperformed the benchmark. Sectorally, FMCG, Consumer Durable and IT were the laggards. Whereas, PSU Bank, Nifty Financial Services and Private Banks outshone

Technical Outlook:

* Nifty started the week on a negative note; however, buying demand emerged in the vicinity of Friday’s sessions low helped it recoup early losses, recovering sharply in the last hour of the session. As a result, the daily price action formed a small green candle indicating, breather after two sessions of up move.

* Key point to highlight is that, post gap-down opening index consolidated in the vicinity of 25200 and managed to closed above it indicating inherent strength. We expect Nifty to gradually head towards short term milestone of 25800 with elevated support at 24700 which is 80% retracement of the current upmove. Bouts of volatility amid global development as well as ongoing earning season would offer incremental buying opportunity. 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.

* The index heavy weight Banking index along with Oil & Gas have surpassed their 2 months high. Further, following the auto index, Metal has clocked a fresh All-time high. Meanwhile, Capital goods, Consumption, pharma, Power indices are undergoing higher base formation. Cumulatively, these indices carry more than two third weightage of Nifty that corroborates our positive stance

* 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. US and India inflation print

b. Beginning of Q2FY26 earning season

c. Development on tariff negotiations

d. 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 : 56625

Technical Outlook

Day that was:

Bank Nifty closed flat with a marginal positive bias and settled at 56,631 (+15 points). The Nifty Private Bank index has mirrored the benchmark, ending the day at 27,790 up (+27 points).

Technical Outlook:

* Bank Nifty started the week on a negative note, however , after the initial decline, the index witnessed buying interest near the previous session’s low. As a result, the daily price action has formed a bull candle, indicating emergence of buying support at lower levels.

* Key point to highlight is that index has maintained its higher bottom formation for third-consecutive session. Index continues to hold above key moving averages and its prior gap-up zone of 55,700, indicating strong underlying momentum and resilience amid global uncertainties. 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. Therefore, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 55,500, representing the 50% retracement of the ongoing up move (54,226-56,770).

* Structurally, Since 2021 bank nifty has shown a tendency to register fresh all-time highs following a decisive close above the preceding two month’s high. The current breakout above this pivotal level reinforces the positive price structure and signals the likelihood of an extension in the ongoing uptrend towards new lifetime highs.

* PSU Bank Index has mirrored the benchmark and closed on a positive note. Index has maintained its higher high-low formation for the third-consecutive session. Index consolidating above its recent swing high (7651) that would help index to extend its current up move to challenge it’s all time high 8050. On the downside, initial support is placed at 7,225, which aligns with the 50% retracement of the latest upswing (6,730– 7,651)

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