IGI Logo

Nifty : 24734

Technical Outlook

Day that was…

Equity benchmark closed on a flat to positive note post GST council meeting amid profit booking. Nifty closed 19 points up to settle the session at 24734. Market breadth was in favor of declines, with an A/D ratio of 1:1.5 where broader markets underperformed the benchmark. Midcap and Small cap closed on a negative note down 0.67% and 0.71% respectively. Sectorally, PSU Bank, IT and Realty underperformed, while, Auto, FMCG and Consumer Durable outperformed.

Technical Outlook:

* Nifty started the day with a gap up of 265 points on back of Next-Gen GST Reforms, everything came as anticipated as a result index underwent profit booking which coincided with 80% retracement of the recent decline from (25153-24404) and filled the opening gap. This resulted in the formation a big bear candle carrying higher-low, indicating profit booking at higher levels.

* As expected, index came in the vicinity of upper band of the range (25000). Going ahead, holding recent low of 24400 levels will be important failing to do so we expected a broader consolidation in the range of 25000-24200 as strong support is placed at 24200 being 200 days EMA, 38.2% retracement of entire up move seen off April lows, coincided with the previous gap zone of May, which indicates a high probability of demand emergence at lower levels.

* Structurally, Since April 2025, there has been five instances of intermediate corrections on an average in the range of 3–4% within the ongoing bull market, each followed by a gradual recovery. We expect index to maintain the same rhythm as the current corrective phase has approached price wise maturity as it has corrected ~3% and now witnessing time wise correction.

* On the market breadth front the % of stocks above 50 days EMA has bounced from the oversold zone of 25-30 and improved where it is currently placed at 37 offering incremental buying opportunity.

* On the broader market front, both Nifty Midcap and small cap closed on negative note amid profit booking and is currently trading in the vicinity of 52-week EMA which has been held since April 2025 offering an incremental buying opportunity, hence focus should be on accumulating quality stocks backed by strong earnings, especially those poised to benefit from next-generation GST reforms and upcoming festive season as we believe strong support threshold is at 24200.

* Key monitorable:

* a) Development of Bilateral trade deal negotiations.

* b) U.S. Dollar index continues to trade below the past two years breakdown area of 100, indicating corrective bias while crude oil closed the week on a flat note.

Nifty Bank : 54075

Technical Outlook

Day that was :

* Bank Nifty closed the day on a flat note and settled at 54,075 up 8 points. Nifty Pvt Bank index mirrored the benchmark, ending the day at 26,286 up 4 points.

Technical Outlook:

* Bank Nifty opened with a positive gap of 138 points tracking Next-Gen GST Reforms; however, profit booking emerged near the gap zone of 26th and 28th August 2025. Consequently, the daily price action formed a bear candle with higher-low, signaling profit booking at higher levels.

* As expected, index breaks above the past four sessions consolidation and closed above previous session’s close. Key point to highlight is that Bank Nifty has managed to hold an identical low for the past four sessions, aligning with the 200- day EMA, thereby establishing a strong support base. Going forward, a decisive close above Thursday’s high will pave the way for a short covering towards 54,900, which coincides with the 50% retracement of the recent decline (56156-53561) as well as the 100-day EMA. On the momentum front, Stochastic oscillator is in oversold territory on the weekly time-frame, with reading of 10, indicating that the corrective phase may not last long. Thus, investors should refrain from aggressive selling at current level.

* Structurally, since August 2022 there has been five instances where Bank nifty has consistently found support near the 52- week EMA post 10% of a correction and gradual recovery often begins. With the current 7% decline approaching toward the 52-week EMA (52900) and the weekly stochastic entering deeply oversold territory, thereby historical evidence suggest a high-probability inflection zone where downside risk is limited.

* PSU Bank Index underperformed the benchmark and closed on a negative note. Index paused the past three days winning streak breaking the higher-high-low structure but was able to close in the vicinity of 100-day EMA, signaling profit booking after three sessions up move. Furthermore, the index continues to trade well above its previous multiple swing low support which coincides with the 200-day EMA placed near 6700, signals a broader uptrend is still intact.

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631