NIFTY OUTLOOK FOR TOMORROW 11 SEP 2024

Overview

Indian equity markets ended on a strong note, with both Nifty and Sensex closing higher. Nifty crossed the 25,000 mark, finishing at 25,041, up 104 points (0.42%), while the Sensex gained 361 points to close at 81921.

• Nifty: +104 points (0.42%) to 25,041.
• Sensex: +361 points (0.44%) to 81,921.

The positive market sentiment reflects investor optimism despite global recessionary concerns, buoyed by India's growth prospects and sliding crude oil prices.

Key Market Observations:

• Nifty: Witnessed recovery from the support cluster at 24,800 – 24,850. The resistance lies in the zone of 25,100 – 25,150, where the 61.82% Fibonacci retracement level is placed. Divergent signals from daily and hourly momentum indicators suggest near-term consolidation within the range of 24,800 – 25,200.
• Bank Nifty: Continued its pullback, facing resistance around 51,400 – 51,500. The support zone is located at 50,800 – 50,900.

Candle Pattern Analysis:

A small positive candle was formed on the daily chart with minor upper and lower shadows. This pattern resembles a doji, although not a classical one, indicating a cautious stance for bulls at this point. A decisive move above 25,200 could open the possibility of new all-time highs, but immediate support rests at 24,900.

Sector Performance:

• Telecom and Media: Top performers, each gaining 2%.
• IT, Capital Goods, Healthcare, and Power: Registered gains of 1% each.
• Oil & Gas: The only sectoral index to end in the red.

Stock Movers:

• Gainers: Divis Labs, LTIMindtree, Bharti Airtel, Wipro, HCL Tech.
• Losers: HDFC Life, SBI Life Insurance, Bajaj Finserv, Bajaj Finance, Shriram Finance.

Market Dynamics:

• Volatility: The market exhibited volatility, with a knee-jerk reaction at the opening followed by a sustainable upmove during the afternoon. However, selling pressure towards the end of the session caused the market to trim its gains.
• Support and Resistance: After early intraday correction, Nifty found support around 24,900/81,400, leading to a reversal and a subsequent rally. The market closed above the critical psychological mark of 25,000/81,800. Below 25,000, the index could retest the 24,900/81,500 levels. Further downside may drag it to 24,850/81,300.

Mid & Small Caps:

• Midcap: BSE Midcap index rose by 0.5%.
• Smallcap: BSE Smallcap index outperformed, gaining 1.5%, ending a streak of underperformance.

Technical Outlook:

• Nifty: Closed just above the key resistance level of 25,100. A strong close above this level is required for confirmation of further upside towards the 25,150-25,175 zone.
• Support: Immediate support is seen at 24,900. A breach could lead to a fall towards 24,850 – 24,750.
• RSI: On the daily chart, RSI shows a bearish crossover, signaling weakness. The sentiment remains weak unless the Nifty decisively closes above 25,100.

Conclusion:

The market completed one leg of the pullback rally, and the 25,000/81,800 level is now crucial for traders. A sustained move above this level could see the index bounce towards 25,150/82,200. On the downside, failure to hold above these levels might lead to retests of lower support zones.

Investors should remain cautious in the near term, as market momentum is expected to stay in a consolidation phase. A break above or below the key resistance and support levels will determine the next directional move.