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Nifty : 23635

Technical Outlook

Day that was ..

The rise in crude oil prices amid escalated geopolitical tension continues to dent the market sentiment. Nifty declined 144 points (0.6%) to settle the weekly expiry session at 23635. However, broader market defied the benchmark move, as Midcap and small caps index gained 0.2%. Sectorally, pharma remained in limelight while Private banks, Oil & gas took a breather.

Technical Outlook :

• The daily price action resulted into a bear candle carrying lower highlow as intraday pullbacks were short lived, indicating continuation of corrective bias.

• Index is likely to open gap-down on back of negative global cues and rise in brent crude prices and bond yields. The lack of follow strength above previous session high persisted over 10th session in a row. Consequently, Nifty approached the maturity of previous correction (24774-24025) seen during early part of August, that hauled daily and weekly stochastic oscillator in oversold territory (placed at 14). Similar 11-12 days corrective pattern was seen during Sept-25, Jun26. In both cases, index staged a 5-6% rally after closing above previous session high in subsequent weeks. As we approach the maturity of price and time wise correction, we believe, next two-three sessions would be crucial for the market.

• Only a decisive close below 23600 (on a weekly basis) would result into extended correction, till then possibility of pullback towards 24000 can not be ruled out. A decisive close above previous session high (23758) would be the prerequisite to confirm the pause in corrective bias.

• Amidst the elevated global volatility, broader market continues to show resilience. Therefore, focus should be on the broader market while Nifty witness subdued traction.

• Structurally, despite ongoing volatility, Nifty continues to maintain higher high-low structure on the larger degree charts, indicating structural uptrend is intact. The index has formed sequential higher bottoms off April low (22182). Therefore, July low of 23600 would be the key level to watch out for in coming sessions

• Historically, two decades data suggest that September has been the volatile month. However, such volatility has paved the way for direction move in subsequent months. Key Monitorable US Inflation print ,Crude Oil

Intraday Rational :

• Trend – Lack of follow through strength signifies corrective bias

• Levels – Sell around 61.8% retracement of yesterday decline

Nifty Bank : 56778

Technical Outlook

Day that was :

Bank Nifty ended the day on a negative note, down 0.5% at 56778 on back of mixed global cues and rise in brent crude prices

Technical Outlook :

• The Index started the day on negative note and closed near low point of the day as intraday pullback where short lived. As a result, the daily price action formed bear candle with lower high lower low, indicating extended correction. Index has failed to close above previous session high for last three sessions indicating corrective bias.

• Since June Index is holding above its 52-week EMA ,in current scenario also it has approached in vicinity of its 52-week EMA. Going ahead we expect index to hold this support and attempt pullback towards higher band placed around 58000 in the coming weeks. Meanwhile, a decisive close above previous session high of 57044 is required (which has been missing over past 4 sessions) to confirm conclusion of corrective phase and open the door for pullback.

• In the process, strong support is placed around 56500 being 52-week EMA .Breach below 56500 will lead to extended correction.

• The PSU Bank Index formed small Doji like candle at 200-day EMA indicating pause in downtrend. Going ahead, follow through strength above last week (8658) high would open the door for next leg of up move towards 9100 levels

Intraday Rational :

• Trend - Prolongation of consolidation above 200 days EMA

• Levels : Sell around 61.8% retracement of yesterday decline

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