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Nifty : 22363

Technical Outlook

Day that was ..

The equity pared Friday’s gains as a surge in Indian 10-year treasury yields (climbing above 7.35%), fluctuating crude oil prices and persistent FII’s outflow dented the market sentiment. The Nifty faced relentless selling pressure throughout the session, ultimately settling at 22,363, down 157 points. Sectorally, Auto, pahrma, realty relatively outperformed the broader markets. The primary laggards dragging down the performance were Financials & FMCG

Technical Outlook :

• The index failed to capitalise initial gap up opening as it faced stiff resistance from 10 days EMA (which has been acting as immediate resistance since mid- August) and slid relentlessly southward, offering no signs of brief recovery throughout the session. Consequently, this persistent selling pressure resulted in a sizable bearish candle that dragged Nifty well below its immediate psychological benchmark of 22,500, probing an intraday low of 22,304. Compounding the damage, a drop in Nifty Bank heavily weighed down the headline index due to its high sectoral weightage.

• The structure experienced a brief shift as the index registered an 8th consecutive weekly decline. Crucially, last week’s Doji candle high(22,776) must be decisively broken to signal an intermediate pause in this persistent corrective structure and open upside towards 23,100. Meanwhile, immediate structural downside support rests firmly on Thursday's panic low of 22,180. This level must be strictly held on a closing basis to prevent a further breakdown toward 21,700 (around the lows of April 2025).

• Moreover, with the 10% correction seen over the past nine weeks, Nifty approached the April 26 low of 22182. Meanwhile, the Next 50 Index remains 14% above the April lows, highlighting relative strength. This suggests that during the next phase of rally, these higher-quality stocks are likely to lead the charge.

• The index has entered a critical zone having faced such a multi-week correction. The daily RSI stands at 34, while the weekly Stochastics are near 14, indicating highly oversold conditions. The index is in the vicinity of the long-term rising trendline originating from the June 4, 2024 low (Election Day panic bottom).

• Additionally, the percentage of Nifty 500 stocks trading above their 50- day EMAs has reached bearish extremes with a reading of 19%, indicating a stretched market poised for a sharp technical pullback when global macroeconomic conditions stabilize.

Key Monitorables

• US & India Inflation print

• Crude Oil

• US 10 Year Treasury Yields

Intraday Rational :

Trend – Resistance at 10-day EMA

Levels – Sell around 80% retracement of Mondays range

Nifty Bank : 54918

Technical Outlook

Day that was :

The equity benchmark failed to capitalise Friday’s up move as a surge in 10 -year treasury yields, rise in crude oil dented market sentiment . The Bank Nifty faced relentless selling pressure, dropping below its key 55 ,000 psychological mark to settle down at 54 ,918 (a loss of 338 points or 0 .61 % ) . PSU Bank relatively underperformed by declining 1 . 2 % .

Technical Outlook :

• The index formed a bearish candlestick after opening flat on Monday, reached an intraday high of 55 ,416 , and then fell sharply to settle around 54 ,918 . This price action resulted in a candlestick with a solid red real body and an extremely short lower wick, indicating that sellers aggressively controlled the late session following the Reserve Bank of India's liquidity tightening measures . The structure reflects a bearish rejection at the upper intraday range, failing to sustain follow -through momentum above the key 55 ,400 horizontal hurdle .

• Looking at the immediate technical hurdles, Bank Nifty has not been able to close above the 55360 –55370 level in the last 3 – 4 trading sessions and has made an identical high at this level . To gather true upward momentum, the index decisively needs a closing above this level which would confirm the resumption of the uptrend and open doors towards the 56400 -56600 levels . Failure to do so means Bank Nifty will consolidate within a strict range between 54330 -55300 .

• Sentiments in the banking space are also being significantly dragged down by the latest Reserve Bank of India (RBI) liquidity -tightening news . The central bank announced that the minimum daily Cash Reserve Ratio (CRR) maintenance requirement for banks will be raised from 90 % to 99 % effective October 16 , 2026 . This aggressive withdrawal of operational flexibility, coupled with an upcoming Rs 25,000 crore government bond sale, is directly sucking excess liquidity out of the banking sector and putting acute pressure on Banking heavyweights .

• Despite this near -term compression, the structural framework remains intact as on a weekly basis, the index still maintains a distinct higher high and a higher low pattern .

• Among oscillators, weekly stochastics is placed at ~28 levels rebounding from oversold territory indicating impending pullback .

Intraday Rational :

• Trend - Supportive efforts from Fridays low

• Levels : Buy around last Thursdays lows .

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