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Nifty : 22937

Technical Outlook

Day that was ..

The equity benchmark tracked firm global cues and edged higher, with Nifty gaining 238 points to settle at 22,937 on Thursday. Market breadth remained sturdy, supported by an A/D ratio of 1.6:1 and strong participation across the broader market. Excluding Auto, all major indices ended in the green, led by Realty, PSU Bank, and FMCG

Technical Outlook :

• The index continued its gradual upward trajectory after extending the initial buying and settled near the session’s high. Consequently, it formed a sizable bullish candle with higher highs and lows, indicating the possibility of continuation in the current upmove.

• Nifty has broken out of its five-days consolidation phase and closed above the immediate hurdle at 22,800. On the smaller timeframe, the move has helped confirm a higher base in the 22,400 zone.

• Over the past five weeks, Nifty has consistently defended the 200- week EMA while oscillating between 22,200 and 23,100. A decisive close above 23,100 would signal the likely conclusion of the corrective phase and open the path towards 23,500. This level corresponds to the three-month falling trendline and aligns with the 50% retracement of the decline from 24,774 to 22,180.

• Despite persistent global headwinds, Nifty has continued to defend its crucial long-term 200-week EMA over the past five weeks. Historical data over the last 25 years suggests that, (barring 2001, 2008, and 2020) declines below the 200-week EMA have typically been limited to about 3% on a median basis. Accumulating equities during such episodes has historically produced returns of around 10% over the subsequent three-to-six-month period.

• Structurally, the current correction within the broader bull market is comparable to the eight major drawdowns observed over the past 25 years, which averaged approximately 17% before resuming their upward trajectory. With Nifty having already corrected by roughly 16% from its January lifetime peak of 26,373, further systemic downside risk appears to be limited.

• Volatility is expected to remain elevated, supported by heightened Middle East geopolitical tensions, rising Brent crude oil prices, and cautious positioning ahead of the US midterm elections. In an extreme volatility scenario, strong support is likely to be found in the 22,200–21,700 zone, which aligns with the critical 61.8% Fibonacci retracement of the macro rally and the key structural low.

Intraday Rational :

• Trend – High wave candle near short term moving average signifies prolonged consolidation

• Levels – Buy around 50% retracement of Thursday’s range

Nifty Bank : 54910

Technical Outlook

Day that was :

Bank Nifty settled the session on a positive note, up 1.2%. At 54910 levels. Meanwhile, the Nifty PSU Bank relatively outperformed by gaining 2.2% for the day

Technical Outlook :

• The index started the day on a flat note and thereafter inched upwards wherein intraday declines were brought into. The daily price action formed sizable bull candle carrying lower high-low, indicating positive bias.

• Going ahead volatility is likely to remain elevated ahead of US mid-term election. Index has closed above its previous session high after eight sessions and closed near 20-day EMA signaling pause in corrective phase. Holding Thursday low will lead to pullback toward 55600 levels being 80% retracement of recent decline.

• In the process, 53800 would continue to act as immediate being placement of September low

• Nifty PSU Bank Index formed bullish Engulfing and close above its 52 weeks EMA which has been respected over past seven months. The formation of higher high-low on the weekly chart would open the door for meaningful pullback.

Intraday Rational :

• Trend - Robust recovery from key support of 53800 confirms strong support zone

• Levels : Buy around 50% retracement of Thursday’s range

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