Renewed optimism about the revival of India -us Trade discussions, together with the first interest of the US Federal Reserve of 2025, increased market sentiment. The positive overflow of recently announced GST reforms continued to help consumption-driven sectors, while crisils prediction of softer inflation at 3.2% for FY26 for FY26 will feed the expectations of further RBI policy dependence later this year. Mixed FII flows, however, kept the overall profit under control.
With this, analyst Sudeep ShahVice -president and head of technical and derivatives research SBI effectsInteraction with ET markets with regard to the prospects for Nifty and Bank Nifty, as well as an index strategy for the coming week. The following are the edited fragments from his chat:
This week witnessed a nice momentum in the markets. Does it look like it will continue?
While we step into the lively season of Navratri from Monday, it feels like the market started its celebrations a week in advance. Just like the rhythmic beats of Garba and Dandiya who become stronger every day, the Benchmark index Nifty has danced its way to a breakout of the symmetrical triangle, followed by a sharp upward rally. By the end of the week, Nifty closed over 25,300 Mark with a profit of almost 1%, which marked the third consecutive week of positivity.
Just as Navratri means the power of dedication and strength, this rally was also in line with our expectations, as we had previously emphasized that Nifty seemed well positioned for an outbreak. Of the recent low point of 24,404, the index has risen more than 1,000 points in just 15 trade sessions. What makes this step even more festive is the wider participation, in which both the Nifty Midcap and the Nifty Smallcap 100 end in the Green for 11 consecutive sessions. Now, just like devised eagerly looking forward to the nine days of Divine Festivities, the market also leaves us with the exciting question – what is there in this great festive rally?
We believe that the index can briefly pause in the upcoming sessions, just like the moment of tranquility between energetic dance beats, before resuming the northern journey. From a technical point of view, the set-up about progressive averages continues to show a strong bullish momentum, while Momentum-based indicators also has a similarly positive ritical. At the top, every sustainable movement above 25,450-25,500 zone could form the scene for the next stage of the rally, which may extend to 25,750 and even 26,000 – a really festive party for the bulls.
Nifty also organized a great performance. What do you think were the factors behind it?
The strong performance of Nifty can be attributed to a mix of supporting domestic and global triggers. In the field of global front, the rate reduction of the FED was on the expected lines, making liquidity conditions favorable for emerging markets. This supported risky appetite about shares. In general, the macro -background of India remains resilient -CPI inflation has been moderated in recent months and the growth of GDP continues to amaze the benefit, which underlies confidence in the economy. Sectorally, PSU banks and automatic names led profit, supported by healthy credit growth trends and robust festive question expectations. In addition, FIIs gradually treated their short positions in the indexfutures after the back of renewed optimism around the India-US rate discussions. On a technical level, Nifty recently witnessed a symmetrical triangular outbreak, which caused short coverage and new long additives in derivatives. In general, the combination of strong macros, supporting flows and favorable global indications Nifty helped an impressive movement higher.
At what important levels do we have to watch out in the coming week?
Speaking of crucial levels, the zone of 25,200-25.150 is expected to act as immediate support, the confluence of the 8-day EMA and the 23.6% Fibonacci retracement level of the recent rally (24.404-25,448). At the top, any sustainable movement above 25,450-25,500 Zone could form the scene for the next stage of the rally, which may extend to 25750 and even 26,000 – a really festive party for the bulls.
A surprise also came from Bank Nifty. The index performed very well this week and closes the third week in Green. Can we expect all time in this index rather than Nifty?
The Banking Benchmark Index Bank Nifty also ended the week on a positive memorandum, which marked his third consecutive weekly profit. From the recent low point of 53,578, the index has organized a sharp recovery of more than 2,200 points in just 11 trade sessions, which reflects a strong comeback in bank shares.
This rally has pushed the index above the advanced averages in the short and medium term, which indicates a shift in Momentum. In particular, the EMAs of 20 days and 50 days have started with slope upwards, which is a bullish technical signal and suggests that the trend strength will be improved in the short term.
Looking ahead, based on the current map structure, the index will probably introduce a short consolidation phase during the next few trade sessions. This break can help the index stabilize and build a stronger base before trying an upward move.
On Technical Front, the 20-day EMA zone is expected to act as an important support area between 55,000-54,900 levels. Holding above this zone will be crucial for maintaining the bullish bias. At the top, the 55,900-56,000 zone will serve as an important resistance, because it coincides with the 61.8% Fibonacci retracement level of the earlier decrease from 57,628 to 53,561. A persistent outbreak above 56,000 could activate a new rally, with potential upward goals around 56,800, followed by 57,500 in the short term.
What is the current conclusion about the FII-Dii situation at the moment?
The long -diving ratio has gradually improved from 7.43% on 5 September to 13.96% on September 18, which indicates a gradual reduction of short exposure by FIIs, which causes careful optimism to suggest. However, the strengthening of the US dollar against the Indian rupid keeps careful and relative to the sidelines for now. Since the beginning of the current financial year, the dollar has strengthened almost 3% against the rupid.
Looking at Fiis and Diis’ Kasmarkt activities since the beginning of September, Fii’s have largely been net sellers or inactive, which reflects their caution in the midst of currency dratility and global uncertainty. On the other hand, diis have been steady buyers, to support market stability in the midst of FII outflows. This divergence suggests that domestic investors dampen the market impact, while FIIs wait for clearer triggers or improved currency conditions before they resume greater investments. In general, this environment calls on to view currency trends and global signals accurately for FII return signals.
Fed’s rate cute from 25 BPS also came on vast lines. This seemed to be largely priced. What is the next factor that will probably influence our markets?
With the 25 BPS interest rate reduction of the FED on the expected lines, markets are now looking at the next set of catalysts. In its own country, the focus will be on the elections of the Bihar, probably in November, because political stability and policy continuity remain important factors of investor sentiment. Any surprises there can dampen sentiment on the market in the short term. In the short term, the F&O cancellation, which starts at the beginning of this month on Tuesday instead of Friday, can contribute to volatility because traders adjust their positions. Macr data will also be crucial -CPI inflation trends, the policy position of RBI and the momentum of the operating result, with Q2 results from October, will guide the direction. US economic data will release worldwide and the impact of current trade stresses or tariff actions will shape the foreign streams. Rough oil prices and China’s Growth Exploice remain extra swing factors. In general, with global liquidity support, but local event risks, the Indian markets can witness increased volatility before resuming their wider trend.
Let’s talk about the shares of the Adani Group after the clean chit of Sebi in the Hindenburg case? What do the shares look like now? 9. Now that we are the most important events that our markets would have influenced, which are the sectors to concentrate?
The sentiment around the shares of Adani Group became sharp positive on September 19 after Sebi had released the conglomerate and the founder of any misconduct in the Hindenburg-linked stock manipulation round. This regulatory relief caused a broad rally about Adani counters, which is a reflection of renewed investor confidence.
Technically, Adani Enterprises rose more than 5%, breaking above the upper Bollinger band and tested the RS 2,500 zone with strong volumes, suggesting a new bullish breakout, after 5 days of narrow consolidation. Adani Totaal Gas distributed more than 7%and Brak decided above the advancing averages in the short term, although a long upper shade refers to profit booking at higher levels. Adani Green Energy won more than 5%, which extended his withdrawal after recovering the RS 1,000 point, which indicates a strong momentum. However, the formation of a doji candle reflected indecision on an intraday basis among market participants. Adani Power also ran higher, with strong volumes that hold up above its short-term EMAs, which also closes above the upper Bollinger band.
That said, the overall map structure is positive with the indicators that support the bullish tone. RSI over counters has moved beyond 60, which is a reflection of the reinforcement of the momentum, while ADX measurements indicate trend gear. The general prospects for Adani shares remain bullish, with potential for further upwards, although intermittent profit booking can occur after steep rallies.
What shares can investors remain on their radar?
From a technical perspective, different shares show strong bullish setups and will probably continue their upward momentum in the short term. Remarkable names are Bank of Baroda, Union Bank, Canara Bank, Punjab National Bank (PNB), Bank of India, MCX, Hudco, Lemon Tree Hotels, Bharti Airtel, Godrej Properties, Sammaan Capital, Bhel and Anant Raj. These shares have been demolished from the most important resistance levels, act over their advanced averages or are supported by a strong volume and momentum indicators so they are attractive candidates for following the short term.
((Indemnification: Recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)
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