In accordance with Axis Securities, the index shaped a small bearish candle with a protracted higher shadow on the weekly chart, indicating non permanent exhaustion after the current rally.
The brokerage believes Nifty is sustaining nicely above its medium-term downward-sloping trendline, which continues to affirm the general bullish construction.
“The assist zone lies between 25,500–25,300 ranges, whereas a sustained transfer above 26,000 may set off shopping for in direction of 26,100–26,300 ranges,” Axis famous in its weekly report.
The agency expects the benchmark to commerce inside a 25,500–26,000 vary within the coming classes, with a blended bias and a constructive undertone so long as it holds above key assist ranges.
On the indications entrance, the RSI stays comfortably above its reference line, suggesting momentum nonetheless favours the bulls. “The weekly chart reveals a wholesome consolidation sample slightly than any reversal signal. Traders ought to proceed to undertake a buy-on-dips technique,” the report added.Market watchers say the transient pullback final week was largely influenced by international and home triggers. Puneet Singhania, Director at Grasp Belief Group, mentioned the market’s tone turned cautious after US Federal Reserve Chair Jerome Powell hinted {that a} December price minimize was not assured, tempering international threat urge for food.”Powell’s feedback revived considerations about inflation and delayed the hopes of early financial easing, resulting in short-term revenue reserving,” he mentioned.
Including to the nervousness, Sebi’s new tips on the methodology and weighting of non-benchmark indices similar to Financial institution Nifty, Bankex, and FinNifty additionally brought on a bout of volatility. The regulator’s transfer to cap particular person inventory weights at 20% and prohibit the highest three constituents to 45% mixed triggered rotational flows and sectoral churn, notably in monetary shares.
Regardless of the muted headline efficiency, the market’s internals remained robust final week. PSU Banks, Oil & Fuel, and Metals led the beneficial properties, whereas Capital Markets and Healthcare lagged. On the institutional facet, International Institutional Traders (FIIs) bought round Rs 2,102 crore price of equities throughout the week, however sturdy Home Institutional Investor (DII) inflows of practically Rs 18,800 crore cushioned the affect and bolstered the market’s underlying power.
In the meantime, the Financial institution Nifty, which had been a key outperformer in October, additionally ended flat final week as promoting stress in personal banks offset beneficial properties in PSU counters. The index continues to commerce above its near-term shifting averages, sustaining a bullish construction.
Total, the short-term correction seems extra like a pause inside a bigger uptrend than the beginning of a reversal. Analysts count on sectoral rotation and stock-specific motion to dominate buying and selling within the coming classes, with Canara Financial institution, HPCL, and SBI Life amongst Axis Securities’ prime picks for the week forward.
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(Disclaimer: Suggestions, options, views and opinions given by the specialists are their very own. These don’t characterize the views of Financial Occasions)
