Bank Nifty regained positive traction after consolidating in the previous by ICICI Direct
Nifty : 25323
Technical Outlook
Day that was…
Equity benchmarks snapped two-days decline tracking firm global cues and appreciation in Rupee. The Nifty settled at 25323 up 0.71%. Market breadth was in favor of advances, with an A/D ratio of 2:1 where broader markets outperformed the benchmark. Both midcap and small cap indices closed on a positive note, 1.11% and 0.82% respectively. Sectorally, all indices closed in green, where Realty, PSU Bank, and Metal outperformed.
Technical Outlook:
* Nifty started the day on a positive note; making higher-high-low throughout the session where intraday dips were bought into and closed above two sessions high. As a result, the daily price action formed a strong bull candle indicating, continuation of the up move.
* Key point to highlight is that, Nifty closed above 25300 levels (highest in past 16 sessions) and is consolidating near one-year falling trendline (25450) while sailing through tariff concerns, quarterly earnings. Therefore, a decisive close above it would confirm conclusion of corrective bias which will indicate the structural change that will open the gate 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
Intraday Rational:
* Trend- Higher high-low formation confirms positive momentum
* Levels: 50% retracement of previous session (25250 – 25460)
Nifty Bank : 56799
Technical Outlook
Day that was:
* Bank Nifty regained positive traction after consolidating in the previous and concluded at 56799, up 0.54%. The Nifty PSU Bank index has outperformed the benchmark, ending the day at 7723 up 1.67%
Technical Outlook:
* Bank Nifty started the session on a positive note and witnessed sustained buying demand throughout the day. As a result, daily price action formed a bullish candle with a higher-high-low structure, indicating continuation of the prevailing uptrend.
* Key point to highlight is that, after a brief pause in the prior session, Index resumed its upward trajectory and closed above the threesession identical high placed near (55760), indicating inherent strength. Going ahead, follow through strength 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 55,500, representing the 50% retracement of the ongoing up move (54,226-56,922).
* 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 all-time 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 outperformed the benchmark and closed on a positive note. Following the breakout from the inverse head and shoulder pattern, the index has maintained its upward trajectory, trading in close proximity to the rising trendline, thereby reaffirming higher-high-low formation as per Dow Theory, indicating sustained bullish undertone. Therefore, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 7,225, which aligns with the 50% retracement of the latest upswing (6,730–7,651)
Intraday Rational:
* Trend- Higher high-low formation confirms positive momentum
* Levels: 50% retracement of previous session (56,727 – 57098)
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