Index opened higher but lack of buying led to profit booking near 61.8% level - ICICI Direct
Nifty :25818
Technical Outlook
Day that was…
Indian equity benchmarks extended their losing streak for a third consecutive session, with the index settling at 25,818, down 0.16%. Market breadth remained decisively negative, reflected in an A/D ratio of 1:2. Broader markets underperformed the frontline index, as Midcap and Smallcap indices declined close to 0.5% each. Sectorally, Nifty Realty and Consumer Durables underperformed while PSU Banks, IT and Metals were the top gainers.
Technical Outlook:.
* The index opened on a positive note, however the absence of follow-through buying triggered profit booking near the 61.8% retracement of the prior session’s range. Consequently, the daily price action formed a bearish candle with wicks on both ends, signalling indecision and a lack of directional conviction at current level.
* Despite the near-term corrective bias, the index continues to hold above its 50-day EMA and the key swing-low support zone of 25,750-25,700, offering a cushion on the downside.
* Going forward, the market is expected to enter a phase of consolidation within the 25,700-26,050 band, amid heightened volatility driven by geopolitical concerns and currency fluctuations.
* A stabilization in the rupee and a sustained breakout above 26,050 could act as a catalyst for the next leg higher, potentially setting the stage for a gradual retest of the all-time high near 26,300 in the coming weeks. In this environment, a buy-on-dips strategy remains prudent, with 25,700 serving as a critical support zone, offering a favourable risk-reward for accumulating quality stocks
Key Monitorable for the next week:
* Bank Nifty along with revival in IT and Oil & Gas would drive index higher as it carries >55% weightage in Nifty
* Since February 2016, USD/INR has been confined to a welldefined rising wedge and has historically exhibited a strong inverse correlation with the Nifty. Historically, there have been five instances where a retreat in USD/INR from the upper band of this wedge averaging a ~4% decline (with a maximum drawdown of ~7%) over a two-month period was followed by the Nifty delivering average gains of ~12% over the subsequent two months. With USD/INR currently hovering near the upper end of its long-term rising wedge, the setup closely mirrors these past inflection points, suggesting the potential for a similar cyclical rhythm to unfold
Intraday Rational:
* Trend- Consolidation within a downward sloping channel.
* Levels: Buy on declines near yesterday lows
Nifty Bank : 58927
Technical Outlook
Day that was:Bank Nifty extended correction for second consecutive day and closed at 58927, down 0.2%. The Nifty PSU Bank Index relatively outperformed gaining 1.3% closing at 8318 levels.
Technical Outlook:
* Bank Nifty opened on flat note, however absence of follow through led to profit booking from 50% retracement of previous session. The daily price action formed bear candle with wicks on both sides indicating lack of any direction move.
* Amid high volatility Index continues to hold lower band of consolidation coinciding with last weeks low around 58800. Absence of decisive close above previous session high has resulted into prolonged consolidation. Hence, for a meaningful pullback to materialize, index need to decisively close above previous session high, which would help index to gradually resolve higher to challenge its all-time high 60100.
* Structurally we have seen 17 days rally (57158-60114)got retraced by 38.2% in just 12 sessions indicating slower pace of retracement.
* Momentum oscillators continue to reflect a bullish bias, while short and medium-term moving averages remain in a steady upward slope, validating the ongoing trend. Any temporary pullback should be treated as a buying opportunity in high-quality banking names, particularly those that delivered solid Q2 earnings, as immediate support is placed near 58,600, corresponding with the 50% retracement of the current advance (57,157–60,114).
* The PSU Bank Index has formed bull candle with higher high higher low consolidating above 50-day EMA. The stochastic indicators is in upward trajectory indicating positive momentum. Nevertheless, pullbacks should be viewed as accumulation opportunities, with strong support around 8,100, being 50-day EMA
Intraday Rational:
* Trend- Previous 2 weeks decline index has retraced 38.2% its preceding 5 weeks 5% up move, indicating healthy consolidation.
* Levels- Buy on decline near 28th Nov 2025 low (58900), being bullish candle featuring an elongated lower shadow
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