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Below the Quote on Market Closing Commentary by Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities

For the second consecutive trading session, the benchmark index Nifty ended on a negative note, reflecting a pause in bullish momentum. On the daily chart, the index formed a bearish candle with a minor lower shadow, indicating selling pressure throughout the session with limited buying at lower levels.

This formation suggests that traders are turning cautious, possibly due to profit booking or lack of fresh triggers. With technical indicators softening and broader market sentiment showing signs of fatigue, the next few sessions will be crucial in determining whether this is a short-term dip or the beginning of a deeper consolidation.

On the sectoral front, Nifty Metal was the top sectoral gainer, ending with a gain of 1.03%, followed by Nifty Oil & Gas, which ended with a gain of 0.20%. On the other hand, Nifty Healthcare & Nifty Private Banks were the top two sectoral losers. On the stock front, Hindalco and ICICI Bank ended up as the top gainers, while Cipla and Hindustan Unilever emerged as the top two losers.

The selling pressure was visible in the broader market indices too but the intensity of selling was relatively less as seen in the frontline indices. Midcap Index ended 0.24% lower while the Smallcap Index closed the day with a loss of 0.21%. The advance-decline ratio was tilted in the favour of the bears as a total of 318 stocks out of the Nifty 500 closed in the red, indicating that the profit booking was broad based and not just limited to heavyweight names.

Nifty View

Post the symmetrical triangle breakout on the daily chart on October 16, the index had maintained a higher-high formation for four consecutive sessions, reflecting strong upward momentum. However, in Friday’s session, Nifty failed to register a new high and closed below the previous day’s low, signalling a pause in momentum and hinting at a short-term consolidation phase before the broader uptrend resumes.

On the weekly chart, Nifty has formed a small-bodied candle with a long upper wick, indicating profit booking at higher levels after the recent rally.

While the index faced rejection from the upper band of the Bollinger Bands, the broader trend remains constructive, with prices still trading above all key moving averages. This suggests that the ongoing pullback may be a healthy correction within an uptrend rather than the start of a reversal.

Looking at key levels, the zone of 25,950-26,000 will act as an immediate resistance for the Index. If the index manages to give a follow through move above the level of 26,000, then the rally can continue further till 26,300 level. While, on the downside, the zone of 25,550-25,500 will act as a crucial support for the Index.

Bank Nifty View

Bank Nifty traded in a narrow range during the initial 30 minutes of Friday’s session before breaking down and ending the day sharply lower at 57700 with a loss of 0.65%

After facing rejection from the upper band of the Bollinger Bands in Thursday’s trading session, the index extended its decline today, closing below the Thursday’s low and forming a sizeable bearish candle on the daily chart. The move reflects profit booking by traders following the recent strong rally in banking stocks.

The decline in Bank Nifty was more pronounced than in the broader Nifty, as most of its index constituents, barring ICICI Bank, ended the session in negative territory.

From an indicator perspective, the RSI, which was in the overbought zone at 76.64, has cooled off to 68.69, suggesting a pause in the ongoing uptrend. However, the MACD line remains above the signal and zero line, indicating that the broader bullish structure remains intact despite short-term weakness.

Looking at key levels, the 57,900–58,000 zone will act as an immediate resistance for the Index. If the index manages to give a follow through move above the level of 58,000, the pullback can continue further till 58,500 level. While, on the downside, the zone of 57,200-57,100 will act as a crucial support for the Index.

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