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Nifty :25795

Technical Outlook

Week that was…

Equity benchmark concluded volatile week on flat to positive note wherein Nifty gained 0.3% to settle the truncated week at 25795. The broader market performed in tandem with the benchmark by gaining 0.6%. Sectorally, IT, PSU Bank, Metal remained in limelight.

Technical Outlook

* The index started the truncated week on a positive note and surpassed 26100 mark for the first time in twelve months. However, profit booking from overbought conditions dragged index lower. Consequently, the weekly price action formed a Doji like candle, carrying higher high-low, indicating profit booking at psychological mark of 26000.

* Nifty started the week with a positive gap-up and hit the 26,000 mark, however lack The formation of higher peak and trough signifies buying demand at elevated support base that makes us reiterate our positive bias and expect Nifty to challenge All-Time High of 26300 in coming month.

* Nifty reclaimed 26000 mark after twelve months of hiatus wherein it absorbed host of negative news around geopolitical issues, Tariff uncertainties, FII's sell-off, indicating revival in market sentiment amid trade deal development. However, profit booking from overbought conditions pulled Nifty below 25800 marks. We believe, the index is undergoing healthy retracement of prevailing 1500 points up move observed in past four weeks. Thereby, any decline from hereon should not be construed as negative instead dips should be capitalised to accumulate quality stocks with strong earnings as key support is placed at 25400

Our positive bias is further validated by following observations:

* Action in Bank Nifty, IT, Oil & Gas: The Breakout from three months consolidation helped Bank Nifty to clock a fresh All Time High, highlighting structural improvement. While optimism around earnings boosted the sentiment in IT, Oil & Gas space. Together, these indices carry 55% weightage of Nifty which would provide impetus to challenge All Time High in the coming month

* Market breadth: The current up move is backed by the improvement in market breadth as currently the ratio chart of stocks hitting new 52 weeks high vs new 52 weeks low (Nifty 500 Universe) continues to inch upward, highlighting strengthening of rally.

* Broader Structure: The breakout from past four months consolidation (25670- 24350) backed by traction in index heavy weights, highlighting structural improvement that would eventually pave the way for next leg of rally

Key Monitorable for the next week:

* Outcome of India-US tariff negotiations

* US Fed meet

* Progression of Q2FY26 earning season

* Gold: Gold has taken a breather after approaching overbought conditions after > 60% rally seen in this year. Going ahead, we expect gold to undergo healthy consolidation in $4400-$3900 range

Intraday Rational:

* Trend- Index is undergoing healthy retracement of prevailing up trend

* Levels: After a positive opening utilize declines towards 61.8% retracement of last leg of up move (25592-26206) to Initiate long position

Nifty Bank : 57699

Technical Outlook

Week that was:

Bank Nifty continued with its winning streak for the 4th consecutive week, closing on a muted note amid heightened volatility to settle at 57,699. The Nifty PSU Bank index has relatively outperformed the benchmark, ending the week at 7,817 up 2.34%

Technical Outlook

* Bank Nifty started the week with a positive gap-up, however, lack of follow-through momentum led to healthy profit booking at higher levels and oscillated ~1900 during the session. Consequently, the weekly price action formed a small bearish candle with an upper shadow, indicating a temporary breather after a sharp rally.

* Key point to highlight is that despite witnessing profit booking post a sharp 7% upswing, the index continues to uphold its position above its previous all-time high and key moving averages, indicating a well supported uptrend structure that will make index healthy. Momentum indicators such as stochastic oscillator on weekly chart is in overbought territory, suggesting the possibility of short term consolidation cannot be ruled out. Hence, one should adopt a buy-on-dips strategy with immediate support placed near 56,800 representing the 38.2% retracement of the ongoing up move (54,226-58,261) and 20-day EMA.

* Structurally, over the past two decades, there have been 17 instances where Bank Nifty, following a decisive breakout above its previous twomonth high, has delivered double-digit returns within the subsequent four months while surpassing its prior all-time high. In the current scenario, with the index decisively breaking out above its previous two-month high, a similar structural rhythm appears to be unfolding, indicating a high probability of achieving double-digit returns and surpassing the all-time high of 57,600 in the coming months.

* PSU Bank Index has relatively outperformed the benchmark and closed on a positive note. As the benchmark index recorded a new all-time high, the PSU Bank index remains merely 3% below its own record peak, indicating potential catch-up move in line with a relative strength emerging within the PSU banking space. Therefore, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 7,310, which aligns with the 50% retracement of the latest upswing (6,730–7,906)

Intraday Rational:

* Trend- Index is undergoing healthy retracement of prevailing up trend

* Levels: After a positive opening utilize declines towards 80% retracement of last weeks upmove (57400-58576)for Initiate long position

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