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Nifty : 23810

Technical Outlook

Day that was ..

The equity benchmark extended its strong recovery phase over fourth session in a row, as a sharp decline in crude oil prices, coupled with hopes of de-escalation in Middle East tensions and global trade unwinding, significantly boosted market sentiment. The Nifty ultimately settled the weekly expiry session at 23,810, up 370 points (~1.6%). The midcap index performed in tandem with the benchmark, up 1%. Sectorally, FMCG, Auto and Cement led the gains, while PSU Banks and Metals relatively underperformed.

Technical Outlook :

• The index witnessed a gap-up opening and marched steadily northward. This persistent buying momentum resulted in a sizable bullish candle, definitively clearing the immediate psychological resistance at 23,500.

• The index demonstrated remarkable follow-through strength following its breakout above the multi-month falling trendline, enabling it to reclaim its 100-day EMA after a two-month hiatus. Consequently, the index retraced its six-week decline within just two weeks, signaling a significant improvement in its price structure. Going forward, sustained performance above the 23,500 breakout level post-US midterm election outcomes will be essential to validate this recovery and establish a stronger foundation for further upward momentum.

• The US midterm election results represent a critical near-term trigger. Historical data from the past 11 occurrences since 1982 indicate that, on eight occasions, the S&P garnered 10% average positive returns in next 3 months. Meanwhile, on six occasions Sensex achieved average positive returns of 12%. Thus, only unexpected negative outcomes could trigger renewed global volatility

• On the downside, the level at 23,200 emerges as a crucial structural support area. This region is likely to serve as the initial cushion during any near-term pullbacks, with its importance further underscored by its alignment with the recent breakout area coinciding with the placement of the 50-day EMA.

• Structurally, the index has maintained its position above its April 26 panic low, which coincided with the long-term 200-week EMA, despite ongoing geopolitical uncertainties and the rise in crude oil prices and bond yields. Consequently, the past six months' price action appears to be forming a potential double-bottom pattern, setting the stage for a durable bottom market

Monitorable Key Indicators:

• US Mid-term Election

• Crude Oil & US 10 year Yield

Intraday Rational :

• Trend – Formation of higher high low signifies positive bias

• Levels – Buy around 80% retracement of Tuesdays range.

Nifty Bank : 55540

Technical Outlook

Day that was :

Bank Nifty ended the session on a positive note, up 0.98% at 55540 levels. Meanwhile, the Nifty PSU Bank relatively underperformed by losing 1.3% for the day.

Technical Outlook :

• The index started the day with gap-up opening and thereafter traded northwards as intraday declines were brought into. The daily price action formed is bull candle with higher high higher low intact indicating positive bias.

• Key point to highlight is that Index has closed above last week high (55068) coinciding with 20-day EMA signaling positive momentum in short term. Going ahead we believe index to head towards 56000 mark being 80% retracement of recent decline.

• On the downside revised support is now placed at 54700 being 50% retracement of current up move (53626-55740)

• Nifty PSU Bank Index formed bear candle engulfing previous session candle indicating profit booking. Going ahead we expect Index to consolidate in the range 8400- 8100 as it continues to form a base in the vicinity of its 52 weeks EMA.

Intraday Rational :

• Trend - Robust recovery from key support of 53800 confirms strong support zone

• Levels : Buy around 80% retracement of Tuesdays range.

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