IGI Logo

Nifty : 23478

Technical Outlook

Day that was ..

The benchmark snapped three sessions losing streak and settled the session at 23478, up 46 points. Broader market underperformed the benchmark as Nifty midcap lost 0.4%. Sectorally, financials outperformed while recently rallied auto, pharma, metal seen profit booking.

Technical Outlook :

• Index traded in a narrow range after a subdued opening. However, fag end price action helped index to settle on marginally positive note. The daily price action resembles a hammer like candle, indicating abating downward momentum.

• The index is likely to witness gap down opening tracking surge in crude oil prices. Nifty has failed to witness follow through strength above previous session high over 12th session in a row, consequently approaching near maturity of Apr-Jun decline ~1500 points, placed at 23230. Similar 11-12 sessions corrective pattern was seen during Sept-25, Jun-26. In both cases, index staged a 5-6% rally after closing above previous session high in subsequent weeks. Hence, we advise traders to refrain from creating aggressive short positions validated by following observations:

a. Index is witnessing inverse co-relation with the Brent crude as rising crude oil prices have dented the market sentiment. Thereby, continuation of upward journey in Brent crude would result into extended correction wherein immediate support is placed at 23200.

b. With ~1300 points decline off-Aug high of 24774, daily and weekly stochastic oscillator has approached oversold territory (placed at 7 and 16, respectively).

• Only a decisive close below 23200 would result into extended correction wherein strong support is placed at 22700 levels being placement of 80% retracement of Apr-Aug rally (22471-24774). Meanwhile, to pause the ongoing corrective phase, a decisive close above Wednesday’s gap area (23623-23572) would be required which will open the door for pullback towards psychological mark of 24000

• Within the broader market we are witnessing mixed activity. As after recent outperformance, slow down in momentum has been seen in midcaps while smallcap continues to show resilience by sustaining well above its 20 days EMA in the vicinity of All Time High. We believe, couple of days breather would help indices to cool off the overbought conditions and gradually set the stage for next leg of up move. Therefore, focus should be on accumulating quality stocks on dips backed by strong earnings

• Historically, two decades data suggest that September has been the volatile month. However, such volatility has paved the way for direction move in subsequent months.

• Key Monitorable US Inflation print ,Crude Oil

Intraday Rational :

• Trend – Formation of lower high-low suggest corrective bias

• Levels – Sell around 50% retracement of yesterday decline

Nifty Bank : 56472

Technical Outlook

Day that was :

Bank Nifty ended the day on a marginally positive note, at 56472 on back of negative global cues and rise in brent crude prices and bond yields.

Technical Outlook :

• Post subdued opening index traded in a narrow range. The day’s price action formed a small bullish candle, reflecting breather amid oversold conditions.

• The index is likely to witness gap down opening tracking rise in crud oil prices amid escalated geopolitical tension. The index failed to close above the previous session’s high for the fifth consecutive session, highlighting persistent corrective pressure that hauled index around 52-week EMA (56500) which has been acting as key support over past 3 months. Sustainability below the same would result into extension of corrective bias towards 55500, representing a 38% retracement of the April–June rally (46,935–58,706).

• Meanwhile, a decisive close above the previous session high of 56,575 is required, which has remained elusive for the past four sessions to confirm a sustained recovery and open the door for a potential pullback.

• The PSU Bank Index formed bull candle with upper shadow indicating pause in downtrend. Going ahead, follow through strength above last week (8658) high would open the door for next leg of up move towards 9100 levels

Intraday Rational :

• Trend - Prolongation of consolidation around 52 weeks EMA

• Levels : Sell around 50% retracement of yesterday decline

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631