September, historically has not been a very decisive month for the index in either direction. Returns of the last 10 years are split right down the middle between gains and losses. The only difference being, that four of the last five years have seen the Nifty deliver positive returns in September, albeit the average return figure being only 1.5% to 2%. With the kind of moves that the index has seen, the bulls would now take even a 2% upmove with both hands.
A positive trigger that the market has going into Tuesday’s trading session is the June quarter GDP number, which, at 7.8% year-on-year, surpassed the CNBC-TV18 poll estimate of 7.5%. Nominal GDP growth also stood at 10.3% from last year.
Tuesday will also be the day when Auto companies will be reporting their sales figures for the month of August. A CNBC-TV18 poll is anticipating it to be yet another month of strong growth for the automobile companies.
While the NSE registered record CAS turnover of nearly ₹40,000 crore on Monday, majorly due to the MSCI rebalancing exercise, the real attention went to the Nifty Bank and the move it saw during the session, which took the index from sub-57,400 levels to above the mark of 58,000 by the close. The 600-point upmove came despite the underperformance of HDFC Bank, India’s largest private lender, which closed nearly 5% off the highs of the session.
| Stock | Reference Price (₹) | Settlement Price (₹) |
| ICICI Bank | 1,443 | 1,454 |
| Axis Bank | 1,264 | 1,300 |
| SBI | 1,044 | 1,060 |
| Federal Bank | 346 | 357 |
| Indian Bank | 872 | 898 |
It will be the Nifty Bank that will be the index to watch on Tuesday as the market will see whether there is any further adjustment taking place in these stocks that led the index higher during Monday’s CAS.
For the Nifty, the bulls continue to remain hopeful as long as 24,000 is held on the downside, below which, further downside towards 23,800 and 23,700 opens up. The index has been making lower highs for three sessions in a row, and the bulls would first want to arrest that slide, by crossing and sustaining above Monday’s high of 24,117.
“Technically, Nifty continues to trade below its key moving averages. The 50-day, 100-day, and 200-day EMAs remain largely flat, suggesting a lack of directional momentum and an ongoing consolidation phase,” Sudeep Shah of SBI Securities said. “Going forward, the 24,000-23,950 zone is expected to serve as a crucial support area for Nifty. A sustained breach below 23,950 could weaken the near-term market structure and open the door for a further decline towards the 23800 mark in the short term,” he added.
Rupak De of LKP Securities believes that the RSI has formed a positive divergence on the hourly charts of the Nifty, indicating the possibility of a near-term pullback. He expects a minor pullback on the Nifty towards the 24,180 – 24,200 levels, after which, supply might emerge at higher levels. A sustained move above 24,200 could add another 100 points to the Nifty tally, while downside support, as per De, is placed at 23,990.
After that sharp closing spike, the Nifty Bank bulls would want the index to sustain above the 58,000 mark, which can trigger a further upmove to 58,200 and 58,500 levels. In case the index does slip back below the 58,000 level, support could emerge first at 57,750 and then at 57,500 on the downside.
Vatsal Bhuva of LKP Securities said that the RSI of the Nifty Bank has entered a bullish crossover, indicating improved momentum. However, since the move was largely driven by CAS, he wants to see another session of follow-up buying to confirm the sustainability of Monday’s breakout above the 50 and 200-Day Moving Average. Immediate resistance is at 58,200, while 57,300 can act as a support.
