Renewed optimism over the revival of India–US commerce talks, together with the US Federal Reserve’s first fee lower of 2025, lifted market sentiment. The constructive spillover from lately introduced GST reforms continued to assist consumption-driven sectors, whereas Crisil’s forecast of softer inflation at 3.2% for FY26 fueled expectations of additional RBI coverage easing later this yr. Nonetheless, combined FII flows stored general features in examine.
With this, analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Analysis at SBI Securities, interacted with ET Markets concerning the outlook for the Nifty and Financial institution Nifty, in addition to an index technique for the upcoming week. The next are the edited excerpts from his chat:
This week witnessed a pleasant momentum within the markets. Does it seem to be it’s going to proceed?
As we step into the colourful season of Navratri beginning Monday, it feels just like the market has already begun its celebrations per week prematurely. Very similar to the rhythmic beats of garba and dandiya that develop stronger with every passing day, the benchmark index Nifty has danced its approach to a Symmetrical Triangle breakout, which was adopted by a pointy upside rally. By the top of the week, Nifty closed above the 25,300 mark with features of almost 1%, marking the third consecutive week of positivity.
Simply as Navratri signifies the facility of devotion and power, this rally too was in keeping with our expectations, as we had highlighted earlier that Nifty appeared well-positioned for a breakout. From the current low of 24,404, the index has surged greater than 1,000 factors in simply 15 buying and selling periods. What makes this transfer much more festive is the broader participation, with each the Nifty Midcap and Nifty Smallcap 100 ending within the inexperienced for 11 consecutive periods. Now, simply as devotees eagerly stay up for the 9 days of divine celebrations, the market too leaves us with the thrilling query — what’s subsequent on this grand festive rally?
We consider the index could pause briefly within the coming periods, very similar to the second of relaxation between energetic dance beats, earlier than resuming its northward journey. Technically, the setup throughout shifting averages continues to showcase sturdy bullish momentum, whereas momentum-based indicators additionally echo an identical constructive rhythm.Speaking about essential ranges, the zone of 25,200–25,150 is anticipated to behave as instant help, being the confluence of the 8-day EMA and the 23.6% Fibonacci retracement stage of the current rally (24,404–25,448). On the upside, any sustainable transfer above the 25,450–25,500 zone may set the stage for the subsequent leg of the rally, probably extending in direction of 25,750 and even 26,000 — a real festive feast for the bulls.
Nifty staged a pleasant efficiency too. What had been the components behind this, in your opinion?
Nifty’s sturdy efficiency might be attributed to a mixture of supportive home and world triggers. On the worldwide entrance, the Fed’s fee lower got here in on anticipated traces, conserving liquidity situations beneficial for rising markets. This supported danger urge for food throughout equities. Domestically, India’s macro backdrop stays resilient—CPI inflation has moderated in current months, and GDP development continues to shock on the upside, underpinning confidence within the financial system. Sectorally, PSU Banks and auto names led features, supported by wholesome credit score development traits and strong festive demand expectations. Moreover, FIIs have been step by step masking their brief positions in Index futures on the again of renewed optimism across the India-US tariff talks. On the technical entrance, Nifty witnessed a symmetrical triangle breakout lately, which triggered brief masking and contemporary lengthy additions in derivatives. Total, the mix of sturdy macros, supportive flows, and beneficial world cues helped Nifty stage a formidable transfer larger.
What key ranges ought to we be careful for within the upcoming week?
Speaking about essential ranges, the zone of 25,200–25,150 is anticipated to behave as instant help, being the confluence of the 8-day EMA and the 23.6% Fibonacci retracement stage of the current rally (24,404–25,448). On the upside, any sustainable transfer above the 25,450–25,500 zone may set the stage for the subsequent leg of the rally, probably extending in direction of 25750 and even 26,000 — a real festive feast for the bulls.
A shock got here in from Financial institution Nifty, too. The index carried out very properly this week, closing the third week in inexperienced. Can we anticipate an all-time excessive on this index before Nifty?
The banking benchmark index Financial institution Nifty additionally ended the week on a constructive word, marking its third consecutive weekly acquire. From the current low of 53,578, the index has staged a pointy restoration of over 2,200 factors in simply 11 buying and selling periods, reflecting a powerful comeback in banking shares.
This rally has pushed the index above its short- and medium-term shifting averages, indicating a shift in momentum. Notably, the 20-day and 50-day EMAs have began to slope upwards, which is a bullish technical sign and suggests bettering short-term development power.
Trying forward, based mostly on the present chart construction, the index is more likely to enter a short consolidation part over the subsequent few buying and selling periods. This pause may assist the index stabilize and construct a stronger base earlier than trying one other upward transfer.
On the technical entrance, the 20-day EMA zone between the 55,000-54,900 ranges is anticipated to behave as a key help space. Holding above this zone will likely be essential for sustaining the bullish bias. On the upside, the 55,900–56,000 zone will function an vital resistance, because it coincides with the 61.8% Fibonacci retracement stage of the prior decline from 57,628 to 53,561. A sustained breakout above 56,000 may set off a contemporary rally, with potential upside targets round 56,800, adopted by 57,500 within the brief time period.
What’s the present inference on the FII-DII state of affairs proper now?
The long-short ratio has step by step improved from 7.43% on fifth September to 13.96% on 18th September, indicating a gradual discount of brief publicity by FIIs, suggesting cautious optimism. Nonetheless, the strengthening US Greenback in opposition to the Indian Rupee is conserving FIIs cautious and comparatively on the sidelines for now. Because the begin of the present monetary yr, the greenback has strengthened almost 3% in opposition to the rupee.
Taking a look at FIIs and DIIs’ money market exercise for the reason that begin of September, FIIs have largely been internet sellers or inactive, reflecting their warning amid foreign money volatility and world uncertainty. Then again, DIIs have been regular consumers, supporting market stability amid FII outflows. This divergence suggests home buyers are cushioning the market influence whereas FIIs await clearer triggers or improved foreign money situations earlier than resuming bigger investments. Total, this setting requires watching foreign money traits and world cues carefully for FII return indicators.
Fed’s fee cute of 25 bps additionally got here on expeccted traces. This largely appeared to be priced in. What is the subsequent issue more likely to have an effect on our markets?
With the Fed’s 25 bps fee lower on anticipated traces, markets are actually eyeing the subsequent set of catalysts. Domestically, the main focus will likely be on the Bihar state elections, more likely to be within the month of November, as political stability and coverage continuity stay key drivers of investor sentiment. Any surprises there can dampen the sentiment out there within the brief time period. Within the close to time period, the F&O expiry rollover, which begins early this month on Tuesday as an alternative of Friday, may add to volatility as merchants modify their positions. Macro knowledge may also be essential—CPI inflation traits, RBI’s coverage stance, and company earnings momentum, with Q2 outcomes beginning October, will information path. Globally, US financial knowledge releases and the influence of ongoing commerce tensions or tariff actions will form overseas flows. Crude oil costs and China’s development outlook stay further swing components. Total, with world liquidity supportive however native occasion dangers rising, Indian markets may witness heightened volatility earlier than resuming their broader development.
Let’s speak in regards to the Adani Group shares after SEBI’s clear chit within the Hindenburg case? How do the shares look now?9. Now that we’re over the most important occasions that may’ve affected our markets, that are the sectors to focus?
The sentiment round Adani Group shares turned sharply constructive on September 19 after SEBI cleared the conglomerate and its founding father of any wrongdoing within the Hindenburg-linked inventory manipulation probe. This regulatory aid triggered a broad-based rally throughout Adani counters, reflecting renewed investor confidence.
On the technical entrance, Adani Enterprises surged over 5%, breaking above the higher Bollinger Band and testing the Rs 2,500 zone with sturdy volumes, suggesting a contemporary bullish breakout, submit 5 days of slender consolidation. Adani Whole Fuel spiked greater than 7%, decisively breaking above short-term shifting averages, although a protracted higher shadow hints at revenue reserving at larger ranges. Adani Inexperienced Power gained over 5%, extending its pullback after reclaiming the Rs 1,000 mark, indicating sturdy momentum. Nonetheless, the formation of a doji candle mirrored indecision on an intraday foundation amongst market contributors. Adani Energy additionally edged larger, with sturdy volumes sustaining above its short-term EMAs, decisively closing above the higher Bollinger band as properly.
Having mentioned that, the general chart construction is constructive with the indications supporting the bullish tone. RSI throughout counters has moved previous 60, reflecting strengthening momentum, whereas ADX readings point out development acceleration. The general outlook for Adani shares stays bullish, with potential for additional upside, although intermittent revenue reserving could happen after steep rallies.
Which shares can the buyers carry on their radar now?
From a technical perspective, a number of shares are displaying sturdy bullish setups and are more likely to proceed their upward momentum within the close to time period. Notable names embrace Financial institution of Baroda, Union Financial institution, Canara Financial institution, Punjab Nationwide Financial institution (PNB), Financial institution of India, MCX, HUDCO, Lemon Tree Accommodations, Bharti Airtel, Godrej Properties, Sammaan Capital, BHEL, and Anant Raj. These shares have both damaged out of key resistance ranges, are buying and selling above their shifting averages, or are supported by sturdy quantity and momentum indicators—making them engaging candidates for short-term monitoring.
(Disclaimer: Suggestions, ideas, views and opinions given by the specialists are their very own. These don’t signify the views of The Financial Occasions)
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