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Nifty :23526

Technical Outlook 

Day that was…

Equity benchmarks extended losses tracking muted Asian and INR weakness. Nifty closed at 23,526, down by 162 points (-0.69%). Market breadth was weak, with an A/D ratio of 1:3 as broader market relatively underperformed. Sectorally, barring FMCG, all indices ended in the red, with Realty, Oil & Gas, and PSU Banks being the major laggards.

Technical Outlook:

* The market experienced selling pressure throughout the session, making lower high-low as intraday pullback were short lived. Index formed Inside Bar pattern on the daily chart indicating range bound activity amid corrective bias. Despite the intraday weakness, supportive efforts emerged near the long-term trendline and the 80% retracement level of the previous up move (23,263–24,857), providing some relief.

* The lack of follow through on either side suggest prolongation of range-bound movement in the near term, with the Nifty oscillating between 23,900 and 23,300. A decisive close above the previous session’s high would indicate a pause in downward momentum that would lead to a pullback towards the upper band of consolidation placed at 23,900, which remains a key resistance for further upward movement. Stock-specific action is likely to dominate onset of the Q3FY25 earnings season.

* Meanwhile, we expect volatility to remain elevated onset of Q3FY25 earning season, new policy measures from Trump government and Union Budget expectation wherein strong support is placed at 23300 it is confluence of 61.80% retracement of Jun-Sept rally (21281-26277) coincided with 52 weeks EMA placed at 23388. In the process, 23900 would continue to act as immediate hurdle.

* On the broader market front, formation of lower high-low suggest continuation of corrective bias. However, the current correction has been in a slower pace as over past four weeks it retraced 61.8% of preceding four week’s up move. Thus, a decisive close above previous session high would be required, accompanied by improving market breadth to resume the next leg of an up move.

Nifty Bank : 49503

Technical Outlook

Day that was :

Bank Nifty experienced a follow through selling from the previous session to settle the day on a subdued note at 49503 , down by 0 .67 % . Meanwhile, Nifty PSU Bank index underperformed the benchmark and ended the day with a fall of 1 .26 %

Technical Outlook :

* The Bank Nifty witnessed a gap -down opening and continued the bearish momentum from the previous session . The index observed selling in the first half, however, supportive efforts in the second half of the session from 49300 which is 50 % retracement mark of previous up -move (46078 -54467), helped index to recover half of the day’s losses . As a result, daily price action formed a small bear candle with lower shadow for the second straight session, indicating corrective bias .

* Going ahead, the follow through strength above previous sessions high would be required to drive index towards upper band of consolidation placed at 51600 . The immediate support is placed at 49300 which is 50 % retracement mark of previous up -move (46078 -54467 ) . Breakout on the either side will dictate the further trend .

* Structurally, since June -24 , on 3 occasions Bank Nifty has maintained the rhythm of not closing below the weekly support mark of 49700 and undergone base formation around 52 -week EMA before unfolding next leg of up move . In current scenario, the index is trading in the vicinity of the same support zone .

* In tandem with the benchmark index, The PSU bank index extended losses and approached November low of 6163 . The breach of that low on a closing basis would result into extended correction . Going ahead, 50 % retracement at 6000 of previous up -move(3962 -8053 ) will act as an immediate support mark, while a higher high -low formation would be required for a meaningful pullback to materialize

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