NIFTY OUTLOOK FOR 26 SEP 2024

The record-breaking run continued on Dalal Street as the Nifty Index managed to close above 26,000 for the first time, led by gains in energy, metal, and media sectors. After a volatile session, the Sensex gained 255.83 points or 0.30%, closing at 85,169.87, while the Nifty was up 63.80 points or 0.25%, finishing at 26,004.20. The day witnessed a mix of subdued movement and a sharp rally in the final hour of trading, pushing Nifty near its intraday high.

Key Highlights:

• Nifty 50: Closed at 26,004.20 (+0.25%)
• Sensex: Closed at 85,169.87 (+0.30%)
• Market Sentiment: Range-bound for most of the session but turned positive toward the close, driven by short-covering ahead of the monthly expiry.

Sectoral Performance:

1. Top Performers:
   • Energy: Steady gains due to positive momentum in power stocks.
   • Metals: Strong buying seen in the sector, supporting Nifty's rally.
   • Media: Led the day’s performance with significant gains.
   • Realty: Saw a notable uptick driven by positive sector-specific developments.
2. Laggards:
   • IT & FMCG: Both sectors underperformed, with notable selling in IT stocks like LTIMindtree and Tech Mahindra.
   • PSU Banks: Weakness observed due to profit-taking in some midcap and smallcap counters.

Stock Performers:

• Top Gainers:
  • Power Grid Corp, NTPC, Axis Bank, Grasim Industries, Bajaj Finserv.
• Top Losers:
  • LTIMindtree, Tech Mahindra, Tata Consumer, Tata Motors, Titan Company.

Midcap & Smallcap Performance:

• Both Midcap and Smallcap indices experienced a minor correction, down 0.5% each. This suggests profit-booking in broader markets, putting pressure on overall market breadth.

Technical Overview:

• The Nifty opened mildly in the red, consolidated with a positive bias throughout the day, and rebounded from the 25,850–25,875 support zone to close above 26,000.
• The daily chart shows a bullish candle, indicating that the uptrend remains intact.
• Resistance: The Nifty faces a strong resistance between 26,200–26,250, while support has shifted higher to the 25,950 level.
• Bollinger Bands: Nifty is expected to continue its rally towards 26,300, where the weekly upper Bollinger band is located.

Bank Nifty Outlook:

• Bank Nifty consolidated with a positive bias and witnessed subdued price action due to the upcoming monthly expiry.
• The current consolidation phase is likely to break out on the upside, with a potential rally towards the 55,000 mark in the short term.
• Support: The critical support level for Bank Nifty is placed at 53,800 – 53,600.

Market Breadth:

• The overall market breadth remained negative, with 1,637 shares advancing against 2,148 shares declining, indicating broader market weakness due to profit-taking, especially in midcap and smallcap stocks.

Outlook:

We maintain a bullish outlook as the Nifty continues to show strong momentum, especially in metal, power, and energy stocks. Despite broader market weakness, sectoral outperformance in energy and realty, along with resilience in Nifty's uptrend, suggests continued strength.

However, traders should remain cautious as global uncertainties and profit-booking in the broader market could lead to intermittent corrections. The ongoing correction in the IT sector may present a buying opportunity for long-term investors.

Key Levels:

• Nifty Support: 25,950
• Nifty Resistance: 26,200 – 26,250
• Bank Nifty Support: 53,800 – 53,600
• Bank Nifty Target: 55,000 in the short term

Investors should focus on stock selection aligned with sectoral trends, with energy and metal sectors showing strong momentum.