StockEdge's Morning Market Analysis - 4th Oct
The Nifty lost 546 points over the day, closing at 25,250. Geo-political news gave bears an edge, causing a gap-down opening, with the market staying low and closing near the day’s lows in a one-sided intraday move. Real Estate and Auto sectors were the top losers, while Pharma and Metals outperformed. All sectors closed in the red. The Dollar Index showed strength, trading near 102. If follow-up buying continues, it may put further pressure on equities—keep a close watch on it.
Technically, breaking the 25,500-600 support level increased bearish momentum. An interesting point to note is that while the US markets remained relatively steady, Indian indices came under pressure. However, this is a correction within a larger trend. The 55-period moving average stands at 24,980, where we can expect the market to find support around the 25K mark. Yesterday’s high of 25,650 forms a gap resistance and will act as the immediate ceiling.
For Bank Nifty - There was an inverse Head & Shoulders pattern breakout in mid-September at 51,700-750, and the index is now back at those levels. It should consolidate around these levels for a few days before a positive turn. A move below 51,750 could bring in further weakness. The anchored VWAP level is at 51,450.
To conclude - This correction is part of a larger uptrend, and 25K should act as crucial support.
Nifty
Bank Nifty
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