NIFTY Index Chart Analysis

Last week was undeniably dominated by the bears, with the Nifty 50 extending its decline for the sixth consecutive session. The index ended the week near its lows, registering a significant drop of 2.65 per cent, marking its steepest single-week decline since February 2025.[EasyDNNnews:PaidContentStart]

Technically, the past six days of decline were impulsive in nature, evident from the fact that the index erased more than 75 per cent of the over 1,000-point upswing in just six trading sessions. During this phase, the index recorded two distribution days, and currently holds a total of three. As a result of last week’s fall, the Nifty is now trading below most of its key moving averages, except for the long-term 200-DMA. The Nifty currently trades 2.04 per cent above the 200-DMA, which is at 24,161, providing significant support for the index.

From a time perspective, the correction from the all-time high is now 12 months old. Historically, many previous corrections have lasted within between 8–13 month period. Only on two occasions did the bear market extend beyond this, stretching up to 21 months. This suggests that, based on historical trends, the current corrective phase may conclude within the next month.

However, from a technical pattern perspective, the Nifty 50, which had been trapped in a broad symmetrical trianglelike pattern, has now experienced a breakdown from this formation on a weekly time frame, which is concerning.

Looking ahead, all eyes will be on the crucial support zone between 24,340 and 24,440. If the index falls below this, the next key support level is around 24,161, marked by the long-term 200-DMA. The 200DMA of 24161 is the next support, which has been flat for the last few months. In any case, the 200 DMA also enters into a downtrend, except for the long-term weakness.

The daily 14-period RSI has fallen below 40, and the MACD has triggered a fresh bearish signal. Additionally, the -DMI has sharply risen above both its previous high and the +DMI, signaling a clear dominance of the bears. On the weekly timeframe, the RSI struggled to break past the 60-mark, retreating from that level and subsequently slipping below its 9-week average. Additionally, the weekly MACD is signaling an increase in bearish momentum, with the -DMI crossing above the +DMI, further reinforcing the dominance of the bears. These technical indicators suggest that the downward pressure on the index may continue in the near term.

In conclusion, there is a high probability that volatility will continue to rise in the coming days. The critical support for the index remains in the 24,340-24,440 range. Any rally from this point is likely to be a relief rally unless the index can close above last Friday's high of 24,869.

Sustaining above the level of 24,869 would open gates for further rally towards level of 25,000-25,040.

STOCK RECOMMENDATIONS

STATE Bank OF INDIA ........................ BUY ........................... CMP ₹870.50
BSE Code : 500112
Target 1 .... ₹900 
Target 2 ..... ₹930 
Stoploss....₹832 (CLS)

S tate Bank of India (SBI), a Fortune 500 company, is an Indian multinational public sector banking and financial services statutory body headquartered in Mumbai. It is the largest banking and financial services organization in India, with an asset base of over ₹61 trillion.

The bank has successfully diversified its businesses through various subsidiaries, including SBI General Insurance, SBI Life Insurance, SBI Mutual Fund, and SBI Card. SBI has also expanded its global presence, operating across time zones with 241 offices in 29 foreign countries.

SBI's stock recently broke out of a flat base pattern, rallying to a fresh 52-week high of ₹880.50. Following a market correction, the stock retraced, but on Monday, it formed a sizable bullish candle, indicating that the bulls are back in control. The highest trading volume in the last two months further signifies strong participation in the stock. From an O'Neil Methodology perspective, the stock has an EPS Rank of 81, indicating consistent earnings, a RS Rating of 74 (fair, indicating recent price performance), and a Buyer Demand rating of B+, reflecting recent demand for the stock.

Considering these factors, we recommend buying SBI with a target price of ₹900, followed by ₹930, and a stop loss at ₹832.

L&T FINANCE LTD ................................. BUY ....................... CMP ₹244.85
BSE Code : 533519
Target 1 ...... ₹265
Target 2 ..... ₹272 
Stoploss.....₹230 (CLS)

L&T Finance Limited (LTF) is a non-banking financial company (NBFC) and a subsidiary of L&T. Incorporated in 2008. LTF announced the successful completion of its merger with its subsidiaries LTF, LTICL, and LTMFTL. Following this, LTF changed its name to LTF and began operating as a unified retail NBFC, housing all its lending businesses under one umbrella.

The stock recently touched its 52-week high of ₹252.20 on September 22, 2025. Since then, it has undergone a corrective phase, halting near the 20-DMA. Interestingly, the stock formed a sizable bullish candle, engulfing the prior bearish candle, which clearly indicates that bulls have overpowered the bears, providing a fresh entry opportunity.

The stock is currently trading above its key moving averages, with all major moving averages in the desired sequence and trending upwards, which bodes well for the trend. The stock also meets several characteristics of the CANSLIM methodology. With a RS Rating of 90, indicating outperformance compared to other stocks, and a Buyer Demand rating of A+, showing strong recent demand, the stock appears poised for a resumption of its rally after the corrective decline. We recommend buying LTF with a target price of ₹265-272 and a stop loss at ₹230.

[EasyDNNnews:PaidContentEnd] [EasyDNNnews:UnPaidContentStart]

[EasyDNNnews:UnPaidContentEnd]