According to The Economic Times, after five straight weeks of losses, the Nifty may be setting up for a short-term rebound toward 23,600-23,800, provided it holds above the crucial 23,300 mark. Latest technical analysis from HDFC Securities confirms this outlook, with Vinay Rajani, Senior Technical Research Analyst noting that the index found support near the previous day's low and formed a Harami candlestick pattern on the daily chart. The sharp correction has pushed short-term momentum indicators into oversold territory, raising the possibility of a recovery. However, Enrich Money's Ponmudi R reports that momentum remains weak with RSI at 22.67, firmly in oversold territory, though the deeply oversold reading leaves room for a short-term technical rebound. The index has declined more than 1,650 points from its August high of 24,772, with the current week's fall taking it close to the 88.6% Fibonacci retracement of the previous rise.
As reported by The Economic Times, three stocks have emerged as top technical picks for the week. Apollo is expected to move towards ₹450 after a falling channel breakout, with a buy recommendation at ₹422 and stop loss at ₹404. Laurus Labs could target ₹2,100 amid a strong uptrend, with a buy level at ₹1,969 and stop loss at ₹1,900. Eternal also looks poised for a short-term recovery, with a target of ₹347 and buy recommendation at ₹323.50 with stop loss at ₹310. The stock has been sustaining at higher levels following a falling channel breakout on the daily chart, with the recent correction being relatively shallow, suggesting it was primarily a phase of profit booking rather than a meaningful trend reversal.
According to SBI Securities, Bank Nifty witnessed buying interest at lower levels following the sharp decline in the previous session, with the index closing 0.89% higher. Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, noted that the banking benchmark formed an inside candle following the sharp decline and witnessed buying traction at lower levels. However, he emphasized that failure to sustain the recovery could keep the prevailing bearish bias intact. The 55,800–55,700 zone could act as a crucial support area, with a sustained breach below 55,700 potentially dragging the index towards 55,200 levels. On the upside, 56,800 is likely to act as an immediate hurdle, with a sustained move above 56,800 potentially extending the pullback towards 57,200 levels.
According to the analysis reported by The Economic Times, the IT sector has witnessed a significant breakdown in momentum, with the Nifty IT index falling sharply during the week, including a 3.24% single-session decline - its steepest fall in about three months. Among frontline IT stocks, Tech Mahindra remains relatively more constructive as it's the only large-cap IT stock trading above its 200-DMA. At current levels, some of the frontline IT stocks are certainly entering oversold territory on shorter timeframes. However, it is still too early to call a bottom. The sector is facing both technical and macro headwinds, with rising US bond yields, rate-hike concerns and uncertainty around global technology spending adding to the pressure. Among the four stocks, I would be relatively more constructive on Tech Mahindra, as it remains the only large-cap IT stock among the four that is trading above its 200-DMA.
As reported by CNBC TV18, private banks were the relative outperformers, with the index gaining 0.5% during the week. The Nifty 50 ended Friday 0.3% lower at 23,389 after falling as much as 1% to an intraday low of 23,231, with the benchmark declining 2.1% for the week. The Nifty Midcap 100 and Nifty Smallcap 100 also ended lower, falling 0.3% and 0.6%, respectively. Banking operations were impacted by a nationwide strike called by bank unions, with employees demanding a five-day workweek and changes to the production-linked incentive scheme. Further strikes are scheduled later this month and from October 26. In the primary market, the National Stock Exchange announced a price band of ₹1,700-1,785 per share for its IPO, with the issue set to open for subscription on September 17. The rupee weakened to around ₹95.6 against the US dollar, while continued foreign institutional investor selling added to the pressure on domestic equities.
