The Indian equity market kicked off the second week of October with bullish momentum, as benchmark indices extended gains following strong technical breakouts. The Nifty 50 surged past key exponential moving averages (EMAs), signaling renewed strength and setting sights on the 25,200 mark. Meanwhile, Bank Nifty broke above a crucial trendline resistance at 56,000, reinforcing the bullish sentiment across financial heavyweights.
Nifty 50: Bullish Breakout Above EMAs
The Nifty 50 index closed near 24,900, decisively above its 20-day and 50-day EMAs, which had previously acted as resistance zones. This breakout is technically significant, as it suggests a shift in short- to medium-term momentum in favor of the bulls.
- Immediate resistance is seen at 25,200, a psychological and Fibonacci extension level.
- Support zones have now shifted higher to 24,600 and 24,400, aligning with the breakout levels and EMA clusters.
- Momentum indicators like RSI are trending above 60, indicating strength without being overbought.
The breakout is backed by strong sectoral rotation, with metals, financials, and auto stocks contributing to the rally. Traders are advised to watch for sustained volume confirmation and avoid chasing extended moves without pullbacks.
Bank Nifty: Trendline Breakout Signals Further Upside
Bank Nifty’s move above 56,000 marks a breakout from a descending trendline that had capped gains for several sessions. The index is now targeting 57,200–57,500 in the near term, with strong support at 55,300.
- Private banks like Kotak Mahindra Bank and HDFC Bank led the charge, supported by positive Q2 business updates.
- PSU banks also showed resilience, with SBI and Bank of Baroda holding key levels.
- Options data suggests strong put writing at 55,500 and 56,000, indicating bullish positioning.
This breakout aligns with broader market optimism and improving macro cues, including easing crude prices and stable bond yields.
Sectoral Snapshot
- Metals: Tata Steel and JSW Steel posted strong gains, supported by global price recovery.
- Auto: Festive demand and upbeat sales data lifted Maruti, M&M, and Bajaj Auto.
- IT: Remained range-bound ahead of earnings season, with Infosys and TCS showing mixed signals.
FII-DII Flow and Market Breadth
Despite continued selling by foreign institutional investors (FIIs), domestic institutional investors (DIIs) have remained consistent buyers, supporting market breadth. The advance-decline ratio remains positive, indicating broad-based participation.
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