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Nifty : 25182

Technical Outlook

Day that was…

Equity benchmark recovered previous day’s losses tracking firm global cues. Nifty settled at 25182 up 0.54%. Nifty midcap and small cap outperformed the benchmark and closed on a positive note up 0.97% and 0.61% respectively. Sectorally, all indices closed in green. Where, Metal, IT and Health Care outperformed.

Technical Outlook:

* Nifty began the day on a positive note; and witnessed buying demand in the vicinity of previous sessions low making higher-highlow throughout the session where intraday dips were bought into. As a result, the daily price action formed a bull candle while closing in the vicinity of previous sessions high indicating, consolidation in the upper band of resistance.

* Key point to highlight is that, over past three sessions index is facing stiff resistance in the vicinity of 25200, indicating, consolidation near resistance. Going ahead, index need to decisively close above 25200 for a meaningful pullback to materialize, else continuation of consolidation in 25200-24700 zone amid stock specific action can be expected ahead of Q2FY26 earning season. Strong support is placed at 24700 which is 80% retracement of the current upmove.

* Structurally, Nifty has approached price and time wise maturity, wherein index has staged a strong rebound after 8 consecutive sessions of negative close, Statistically, index can garner 7% rolling return in a month. We expect the same rhythm to follow. Further, as per seasonality, October despite being a volatile month, has been one of the best month for markets in last 12 years. Nifty has given positive returns on 9 out of 12 occasions. The average return for Nifty for October in last 12 years was >3%. However, after >600 points of rally index is lacking strong market breadth, Hence, we believe continuation of consolidation in the range of 25200-24700 zone.

*On the market breadth front the % of stocks above 50 days SMA and 200 days SMA (Nifty 500 Universe) has not witnessed significant traction as currently it is at 51% and 61% compared to past two weeks reading of 63% and 70%.

* Key Monitorable:

* a) Development on tariff negotiations

* b) Beginning of Q2FY26 earning season

*c) Quarterly business updates

* d) Brent crude decline below 4 months low resulted into reverse flag breakdown, indicating continuation of corrective bias. Falling crude oil prices bodes well for domestic market.

Nifty Bank : 56192

Technical Outlook

Day that was:

Bank Nifty closed the day on a positive note and settled higher at 56192 up 0.31% amid volatile session. The Nifty PSU Bank index has outperformed the benchmark, ending the day at 7,569 up 0.60%

Technical Outlook:

* Bank Nifty started the day on a firm note and, after a initial intraday dip, found buying support near the previous session’s low and oscillated ~1200 points during the session. Consequently, the daily price action has formed a bullish candle with wicks on both ends, signifying consolidation in near-term.

* Key point to highlight is that, index manage to hold above its key moving average and its previous gap support (55700), suggesting that the current decline is a healthy consolidation within an ongoing uptrend. As index likely to oscillate within the 55600-56800 band in the near term. A decisive breakout above 56800 would confirm the continuation of the uptrend, paving the way for a retest of its all-time high 57600. 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, index has recovered its entire eight-day decline within the last four consecutive session of gains, indicating a sharp turnaround and faster pace of retracement, which bodes well for a sustained upward momentum in the coming session.

* Outperforming the benchmark, PSU Bank Index closed on a positive note. As a result, the daily price action formed a inside bar, indicating consolidation phase in near-term. Follow through strength above recent swing high (7651) would help index to extend its current up move to challenge its all time high 8050. On the downside, initial support is placed at 7,181, which aligns with the 50% retracement of the latest upswing (6,730–7,651).

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