The index recouped last sessions decline and formed a bullish engulfing pattern - ICICI Direct
Nifty : 22722
Technical Outlook
Day that was .. The Nifty 50 staged a strong recovery on Tuesday, surging approximately 358 points or 1.6% to close at 22,721. The rally was led by IT, Financials and Realty, while Healthcare underperformed. Banking stocks also contributed significantly to the advance, given their substantial weightage in the index. Large-cap stocks outperformed the broader market, with the Nifty Midcap index gaining 1.06% and the Smallcap index rising a marginal 0.11%. The session marked a strong improvement in market sentiment following the recent prolonged decline.
Technical Outlook :
• The index recouped last sessions decline and formed a bullish engulfing pattern. Notably, this session delivered the strongest upward momentum since August 2026, underscoring the aggressive nature of the reversal.
• Nifty reclaimed its 10-day EMA for the first time in roughly 12 trading sessions. By taking out the highs of the previous three sessions, the index has materially repaired its immediate technical structure.
• The index has maintained its historical rhythm of arresting corrective phase after 8 consecutive weeks decline. The current supportive efforts from oversold territory helped index to defend long term rising trend line that coincided with 200 weeks EMA (on a weekly closing basis). Going ahead, a decisive breakout above last week’s high of Doji like candle (~22800) would confirm pause in corrective bias, clearing the path for an extended rally up to 23,150, a target that aligns with the 38.2% Fibonacci retracement of the preceding nine-week decline.
• Structurally, the panic low of 22,180 (printed last Thursday) remains the definitive major support as it coincides with rising trendline originating in June 2024, with the recent rebound from the 22,200– 22,300 zone reinforcing the significance of this long-term support. Only a breach below this on a closing basis would result into extended correction towards strong support of 21700.
• Large-cap outperformance, alongside the stronger contribution from banking stocks, has supported the benchmark's rebound. The relatively muted gains in midcaps and smallcaps warrant monitoring to assess whether participation broadens in the coming sessions.
• Market breadth is showing a strong positive turn, with the percentage of Nifty 500 stocks trading above their 50-day EMAs nearly doubling from 14% to 25%. This significant improvement highlights an emerging recovery, offering attractive room for further broad-based growth as more stocks join the rally.
Key Monitorables
• US & India Inflation print
• Crude Oil
• US 10 Year Treasury Yields
Intraday Rational :
Trend – Close above 10-day EMA, signifies revival in uptrend Levels – Buy around 50% retracement of Tuesdays range
Nifty Bank : 55481
Technical Outlook
Day that was : Bank Nifty closed 1% positive at 55481 levels on nifty weekly expiry day on back of mixed global cues. PSU Bank relatively outperformed for the day gaining 1.4%.
Te chnical Outlook :
• The index opened on positive note and thereafter witnessed breakout above previous session high (55416) signaling acceleration of upward momentum, as intraday pullback were brought into. Consequently, closed near the day high. This price action resulted in a Bull candle engulfing previous day price action indicating positive bias
• Key point to highlight is that Index has closed above its short term 20-day EMA for first time since September 2026 which was acting as resistance signaling conclusion of corrective bias. In addition to that, index has also witnessed breakout above 54400 which was acting as resistance since last 2 weeks indicating resumption of up move.
• Going ahead, to extend the ongoing move, sustenance above 54400 levels would confirm acceleration of the uptrend and open doors towards the 56400-56600 levels. Failure to do so means Bank Nifty will consolidate within a strict range between 54370- 55400.
• The structural framework remains intact as on a weekly basis, the index still maintains a distinct higher high and a higher low pattern.
• NiftyPSU Bank Index is consolidating in vicinity of 52-week EMA maintaining higher high higher low indicating positive momentum.
• Among oscillators, weekly stochastics is placed at ~34 levels rebounding from oversold territory indicating impending pullback. Intraday Rational :
• Trend - Close above 20-day EMA, indicating conclusion of corrective bias
• Levels: Buy around 50% retracement of Tuesdays range
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