Bank Nifty ended the week on negative note down 0.44% at 57491 on back of mixed global cues - ICICI Direct
Nifty : 24366
Technical Outlook
Week that was ..
The equity benchmarks snapped two-weeks winning streak to close on a subdued note at 24,366 down 0.8%. While large caps caught their breath, broader market took center stage as Midcap index clocked fresh highs, relatively outperforming with a 0.7% gain. Sectorally, Consumer discretionary, realty , defence remained in limelight while metal, financials took a breather.
Technical Outlook :
• The lack of follow through strength resulted in extended correction towards 200 days EMA (24385). Consequently, weekly price action formed a bear candle carrying lower high-low, indicating breather.
• As we complete the earnings season, Nifty is transitioning into a volatility contraction pattern. Historically, breakouts from contracting range usually result into bigger moves in subsequent weeks. Given the sustained outperformance during earning phase in PSU Banks, Pharma, Realty, Capital Goods and Defence, any corrective dips should be viewed as an accumulation opportunity in a stock backed by strong earnings as immediate support for Nifty is placed at 24000 being placement of three months rising trend line that coincided with gap area seen during 29th July (24040-24136).
• Over past eight sessions Nifty retraced merely 50% of preceding seven session ~1150-point upmove, indicating slower pace of retracement which has effectively cooled off overbought conditions without compromising larger uptrend.
• It is important to highlight that, during past eight sessions, index failed to sustain above previous session’s high. Thereby, a decisive close above previous session high would be required to pause the ongoing corrective move and resolve higher towards 24600
• Structually, since April 2026, index has seen forming “higher lows” while pricing in host of negative news on geopolitical uncertainty and crude oil volatility. Hence as long as Nifty holds above the previous swing low of 23600, the positive bias remains intact. A decisive breakout above upper band of past four months consolidation (placed at 24600) would trigger the next leg of up move till then prolongation of consolidation in 24600-23600 range. Our constructive stance is based on following observations :
I. Currently, the index in forming a higher bae after reclaiming its 200- day EMA after four months consolidation. Historically, there have been 8 occasions where Nifty has remained below its 200 days EMA for at least 4 months and subsequent move has delivered double digit returns over the next 3 to 6 months. II. The Midcap index continued to record fresh highs while small cap index traded in the vicinity of All Time High that is backed by significant improvement in the broader market as currently 56% of stocks of Nifty 500 universe are trading above 200 days SMA compared to three weeks back reading of 48%
Intraday Rational :
• Trend – over the past seven sessions, the index has retraced merely 50% retracement level of preceding seven session ~1150-point upmove, indicating slower pace of retracement.
• Levels – Buy around Friday’s low
Nifty Bank : 57491
Technical Outlook
Week that was :
Bank Nifty ended the week on negative note down 0.44% at 57491 on back of mixed global cues.
Technical Outlook :
• Index started the week on a flat note and thereafter remained range bound throughout the week trading in the range 58020-57100 indicating breather. As a result, the weekly price action has resulted into small bear candle with lower high lower low indicating extended breather.
• Index continued its consolidation above 50-day EMA for fourth consecutive week indicating healthy consolidation. Going ahead, we believe index would resume its uptrend and head towards 58500 that would open the door for next leg of up move towards 60000 in the coming week. In the process, strong support is placed around 56800 being the placement of four months rising trendline coincided with 100 days EMA
• Another observation is that over last 6 weeks Index has retraced by 38.2% of earlier 3 weeks rally, indicating slower pace of retracement which would help to set stage for next leg of rally.
• The PSU Bank Index has formed Inside bar candle within previous week high low range indicating breather. Going ahead, follow through strength above last week week (8857) high would open the door for next leg of up move towards 9100 levels
Intraday Rational :
• Trend - Prolongation of consolidation in vicinity of 57500, indicating positive bias
• Levels : Buy around 80% retracement of last 4 days range.
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