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Nifty :25585

Technical Outlook

Day that was…

Equity benchmarks extended its bullish momentum for the second session tracking firm global cues. The Nifty settled at 25585 up 1.03%. Sectorally, barring PSU Bank all indices closed in green, where FMCG, Realty, and Nifty Private Bank outperformed.

Technical Outlook:

* Nifty opened with a gap up and continued its positive momentum making higher-high-low throughout the session where intraday dips were bought into. As a result, the daily price action formed a strong bull candle indicating, continuation of the up move.

* Key point to highlight is that, Nifty closed above 25500 levels (highest in ~4 months) and witnessed a breakout above one-year falling trendline (25450) indicating structural improvement. Thursday’s upmove was seen from rate sensitive sectors majorly concentrated in large cap Nifty heavy weight stocks. Wee expect Nifty to endure its northbound journey and head towards short term milestone of 25800. Witnessing Thursday’s strong momentum, we revise our support at 25100 which is 50% retracement of the current upmove coinciding with 20-day EMA. Bouts of volatility amid global development as well as ongoing earning season would offer incremental buying opportunity.

Our positive bias is further validated by following observations:

* The faster pace of retracement in Bank Nifty helped index to resolve out of 2 months high. The banking internals like private banks, PSU Banks, NBFC’s are showing structural improvement that makes us believe, Bank Nifty is gearing up to challenge it’s All Time high of 57600 in coming months.

* Structurally, Index staged a strong rebound after approaching maturity of price and time wise correction. Further, seasonality favours bulls in October month that would pave the way for Nifty challenging All Time high of 26300 by the year end.

* Market breadth witnessed month-on-month improvement on the ratio chart as rising ratio chart of stocks making new 52 weeks high vs new 52 weeks low (Universe: Nifty) signifies broadening of rally.

Key Monitorable for the next week:

a. Q2FY26 earning season b. Development on tariff negotiations c. Gold: With > 50% up move in this year the monthly RSI has surpassed 90 levels for the first time since 1980. Such overbought conditions suggest possibility of short-term breather wherein Gold can consolidate in $4300- $3700 range

Intraday Rational:

* Trend- Higher high-low formation confirms positive momentum

* Levels: 50% retracement of previous session (25,460 – 25,699)

Nifty Bank : 57422

Technical Outlook

Day that was:

Bank Nifty extended its upward momentum and concluded the session on a strong positive note at 57,422, up 1.10%. The Nifty Private Bank index has outperformed the benchmark, ending the day at 28,136 up 1.48%

Technical Outlook:

* Bank Nifty started the session with a positive gap and witnessed buying demand throughout the day. As a result, the daily price action formed a bullish candle carrying higher high-low formation, indicating continuation of upward momentum.

* Key point to highlight is that, Nifty Bank has witnessed a faster pace of retracement of its prior decline and is now hovering merely 200 points below its all-time high, clearly highlighting a notable structural improvement in the underlying trend. Going ahead, a decisive breakout above the all-time high of 57,630 would signal a resumption of the primary uptrend, paving the way for an extended move towards 58,500, being 123% implied target of the previous decline (57,630- 53,561). Therefore, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 55,900, representing the 50% retracement of the ongoing up move (54,226- 57,525).

* Structurally, over the past two decades, there have been 17 instances where Bank Nifty, following a decisive breakout above its previous twomonth high, has delivered double-digit returns within the subsequent four months while surpassing its prior all-time high. In the current scenario, with the index decisively breaking out above its previous twomonth high, a similar structural rhythm appears to be unfolding, indicating a high probability of achieving double-digit returns and surpassing the all-time high of 57,600 in the coming months.

* PSU Bank Index has relatively underperformed the benchmark and closed on a negative note. Following the breakout from the inverse head and shoulder pattern, the index has maintained its upward trajectory, trading in close proximity to the rising trendline, thereby reaffirming higher-high-low formation as per Dow Theory, indicating sustained bullish undertone. Therefore, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 7,242, which aligns with the 50% retracement of the latest upswing (6,730–7,774)

Intraday Rational:

* Trend- Higher high-low formation confirms positive momentum

* Levels: 50% retracement of previous session (57,130 – 57592)

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