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Stock market recap: Indian stock markets extended gains for a second consecutive session on Thursday, 16 October 16, with the Sensex surging 862 points to 83,467 and the Nifty 50 climbing 178 points to 25,585.

Strong global cues and optimism over an India-US trade deal drove the rally. In just two sessions, investors have added nearly ₹7 trillion in market wealth as the BSE’s market capitalization rose to ₹467 trillion

Indian equities extended their winning streak on 16 October, with benchmark indices closing firmly higher amid broad-based buying and supportive global cues. Nifty 50 advanced 1.03% to end at 25,585.30, gaining 261.75 points, while Sensex climbed in tandem, led by strength in FMCG, Auto, and Consumer Durable stocks.

The advance-decline ratio remained positive at 1,812 advances against 1,280 declines, reflecting broad market participation. On the sectoral front, Nifty FMCG surged 2.02%, followed by Nifty Consumer Durables (+1.53%), Private Bank (+1.48%), and Auto (+1.27%), while PSU Bank (-0.44%) and Financial Services (-0.15%) saw mild profit booking. Heavyweights in Consumer and Banking counters drove sentiment, supported by easing crude prices and firm institutional flows.

The index broke out of a recent consolidation phase and now trades well above all its key moving averages, all of which are turning upward, indicating renewed bullish momentum. The price structure suggests a strengthening trend, backed by healthy volume participation.

The 14-day RSI climbed to 66.8, reflecting improving strength without yet entering overbought territory, leaving room for further upside. Simultaneously, the MACD has issued a fresh bullish crossover above the signal line and turned positive, confirming a shift in momentum toward buyers.

According to O'Neil’s methodology of market direction, the market status has been downgraded to an "Uptrend Under Pressure" as Nifty breached its "50-DMA" and the "distribution day count" is at four.

The index gave a fresh breakout above a downward-sloping trendline, signaling a bullish bias in the short term. It now faces its next resistance zone in 25,650–25,700, and a decisive move above this band could open the path toward its all-time highs of 26,000–26,300. On the downside, 25,300 remains the first key support level, followed by a stronger base near 25,000. Holding above these supports will be critical to sustaining the ongoing momentum.

Bank Nifty extended its winning streak on 16 October, closing the session on a strong note amid sustained buying interest in major private and PSU Banks. The index opened at 57,139.95 and surged to an intraday high of 57,525.80 before settling at 57,422.55, up 622 points or 1.10%. The formation of a robust bullish candle on the daily chart signifies strong upward momentum and continued dominance of buyers. The index’s position above key short-term moving averages reflects strengthening sentiment and firm control of the bulls.

Momentum indicators further affirm the positive undertone. The RSI has moved up to 72.64, indicating robust strength though approaching overbought levels, while the MACD remains in positive territory with a bullish crossover intact. The 21-, 50-, and 100-day SMAs are closely aligned, suggesting strong underlying trend support and confirming a healthy medium-term structure. However, traders should stay watchful for mild consolidation or profit booking near resistance zones after the recent sharp rally.

The overall trend remains decisively bullish as the index trades comfortably above its 200-SMA at 53,438. Immediate support is now placed near 55,800–55,500, while the next major support zone lies around 55,000. On the upside, a sustained move above 57,600–57,800 could open the gates for a fresh leg of rally toward 58,500. Dips toward support areas are likely to attract renewed buying interest, reaffirming that Bank Nifty remains in a strong uptrend with a “buy-on-dips" strategy favoured for the near term.

Bank Nifty remains firmly positioned on a strong bullish trajectory, holding comfortably above all its key moving averages, including the 200-day SMA. Immediate support lies at 55,800–55,700, maintaining the index’s positive structure. Sustaining above these levels keeps the broader outlook optimistic, with potential targets around 57,600–57,800. Any minor dip toward support zones may attract fresh buying interest, while a clear breakout above 57,800 would signal the start of a new rally phase. However, traders should remain cautious of profit-taking at higher levels in the near term.

MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.

Trade name: William O’Neil India Pvt. Ltd.

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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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