The Indian equity markets wrapped up October on a positive note, with both Nifty and Bank Nifty registering strong monthly gains. However, profit-taking and moderating momentum indicators suggest a short-term consolidation or corrective phase could be underway.
Nifty Overview: Four-Week Rally Pauses as Shooting Star Emerges
The Nifty index ended the session at 25,722.10, down 0.60%, as selling pressure persisted into the weekend. Despite this short-term decline, the index closed October with a 4.51% gain, reflecting sustained investor optimism throughout most of the month.
However, every week, Nifty slipped 0.28%, forming a shooting star candle on the weekly chart. This pattern often signals early signs of exhaustion after a strong upmove, suggesting a possible short-term correction ahead. The decline also snapped Nifty’s four-week winning streak.
On Friday, the index extended losses for the second consecutive session, closing 155.75 points lower, below the previous day’s low. It now appears to be transitioning into a bearish-to-sideways phase, unless it decisively reclaims the 25,900–26,000 zone.
Technically, Nifty’s close below the 9-day exponential moving average (9-EMA) suggests a temporary halt in bullish momentum.
- Immediate Support: 25,500
- Key Resistance: 25,900–26,000
- Critical Level for Strength: 26,100 (swing high)
The RSI (14) has eased to 58, indicating cooling momentum. A decisive breach below 25,500 could trigger a double-top breakdown, accelerating weakness toward lower supports. Conversely, a sustained move above 26,000 will be required to restore strength and resume the uptrend.
Bank Nifty Outlook: Gains 5.7% in October but Shows Signs of Fatigue
The Nifty Bank index ended the session at 57,776.35, down 0.44%, reflecting mild profit booking after a strong run. Despite the short-term dip, the index delivered a robust 5.75% monthly gain in October, marking one of its best months in recent quarters.
On a weekly basis, the index added 0.13%, forming a doji candle that signals hesitation near higher levels. The pattern indicates that buyers and sellers are in equilibrium, often preceding a phase of consolidation or pullback.
Technically, Bank Nifty is showing visible fatigue after testing the upper threshold of its rally. A negative RSI divergence has started to emerge, suggesting waning momentum even as prices remain elevated.
The daily RSI has cooled to around 62, while the MACD histogram has begun to flatten, both reflecting reduced directional strength. The index also slipped below its 9-EMA — a short-term sign of weakness after a prolonged climb.
- Support Zone: 57,500–57,200 (immediate)
- Next Support: 57,000
- Resistance Zone: 58,100–58,200
A sustained move above 58,200 will be essential to revive bullish momentum, while holding above 57,500 will help maintain the broader uptrend structure.
Market Summary: Healthy Pause After a Strong Month
Both Nifty and Bank Nifty closed October with impressive monthly returns, but the emergence of profit booking and technical fatigue signals that markets may enter a time-based consolidation phase.
While the overall bullish structure remains intact, traders should adopt a selective and cautious approach in the near term. The 25,500–25,700 (Nifty) and 57,500–57,700 (Bank Nifty) zones will act as critical support levels, offering potential opportunities for accumulation.
A decisive breakout above 26,100 (Nifty) or 58,200 (Bank Nifty) could reignite bullish momentum and set the stage for the next leg of the rally.
Key Takeaways
- Nifty and Bank Nifty delivered 4.5% and 5.7% monthly gains in October.
- Momentum indicators show early signs of fatigue, hinting at consolidation.
- Key supports: Nifty – 25,500, Bank Nifty – 57,500.
- Sustaining above key resistances can resume upward momentum.
- Overall, the broader uptrend remains intact despite near-term cooling.
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