Indian equities benchmark extended its losing streak for fourth-consecutive session, tracking negative global cues - ICICI Direct
Nifty :25157
Technical Outlook
Day that was… Indian equities benchmark extended its losing streak for fourth-consecutive session, tracking negative global cues. Nifty settle at 25,167 down 0.30% Market breadth remained negative with an A/D ratio of 1:2. In broader market, Both Nifty Midcap and Smallcap has relatively underperformed the benchmark with decline of 1% each. Sectorally, Barring Metal and Oil&Gas all other indices closed flat to negative wherein, Consumer durables and BFSI emerging as the top laggard
Technical Outlook:
* The index opened the day on a negative note and accelerated its decline below previous day’s low; however supportive efforts emerged from lower levels and closed near its 200-day EMA(25,124). As a result, the daily price action formed a Doji candle in the vicinity of 200-day EMA, reflecting potential exhaustion of selling pressure. A decisive move above the previous session’s high would signal a pause in prevailing downward momentum and could trigger for technical pullback towards 25,600 zone
* Index is likely to open Gap up on back of ease of geopolitical tensions. Key point to highlight is that index has witnessed buying interest emerged near oversold levels, with supportive demand seen around the 200-day EMA coinciding with the lower band of the rising channel drawn from the August–September 2025 lows.
* Post the bottom formation in March 2025, there has been two such instances the Midcap Index arrested a meaningful correction near 52- week EMA before resuming its upward trajectory. In the current scenario as well, the index has witnessed supportive efforts near 52-week EMA, mirroring the earlier corrective cycle. With broader markets has entered into oversold territory, it suggests the ongoing decline is more in the nature of a healthy pullback rather than a trend reversal, indicating a rising probability of stabilization and base formation.
* Therefore, we advise one should refrain from aggressive selling at current levels and instead, should adopt a selective accumulation approach, focusing on quality stocks delivering strong Q3 earnings, as strong support is placed at 24700 being 80% retracement of its preceding up move (24335-26325) On a market breadth perspective:
* Historically, market breadth bottoms when the percentage of stocks trading above their 200-day SMA falls below 15%, while rallies typically peak only when this figure approaches 90%.
* Currently, this metric stands near 29%, well below exhaustion levels and still beneath equilibrium. This suggests a large universe of stocks remains under-participated, leaving ample room for further upside and increasing the probability of the index eventually surpassing its previous highs and entering the next leg of the uptrend. Key Monitorable: a) Q3-FY26 earnings b) India-US Trade deal c) US GDP data d) BOJ policy rate Intraday Rational:
* Trend – Lower high-low structure
* Levels - Buy near 50% retracement of Wednesday upmove
Nifty Bank :58800
Technical Outlook
Day that was:
Bank Nifty extended its decline for third-consecutive session to settle at 58800 down 1%. Nifty PSU Bank has mirrored the benchmark and declined 1%
Technical Outlook:
* Index opened the day on a negative note thereafter breached lower band of consolidation around 58700, however in the latter half supportive efforts emerged near 100-day EMA. As a result, the daily price action formed a bear candle with wicks on both ends, indicating elevated volatility.
* Key point to highlight is that Index rebounded after taking support in vicinity of 100-day EMA indicating buying demand at lower levels. Going ahead, we believe follow through action above previous session high could open the path for technical pullback towards 59500, failure to do so will led to a consolidation in the 58,100-60000 range. Key support for index is placed at 58100 being 100-day EMA
* Structurally, we have seen Nifty has corrected (5.5%) from All time high and BankNifty has corrected (3.5%) from indicating Bank Nifty has been relatively outperforming the benchmark.
* Nifty PSU Bank Index witnessed profit booking for second consecutive day indicating breather. We expect consolidation in the range of 8700-9100.The 20-day EMA is also placed around 8700 levels coinciding with 61.8% retracement of current upmove
Intraday Rational:
• Trend- Lower high-low structure
• Levels: Buy near 61.8% retracement of Wednesday up move
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