Bank Nifty ends 3-day fall, up 0.02% amid trade worry - ICICI Direct
Nifty : 25082
Technical Outlook
Day that was…
Indian equity benchmarks extended breather for the straight fourth consecutive session amid weak global cues due to lack of clarity on India-US bilateral trade deal. Consequently, Nifty settled the day at 25082, down 0.27% wherein broader market relatively outperformed by gaining >0.70%, each. Sectorally, Realty, Healthcare and Consumer Durable outperformed, while, IT, Private Bank and Oil& Gas underperformed.
Technical Outlook:
* Index started the week on a negative note and under went profit booking in first half of the session however supportive efforts near 25000 levels helped index erase half of the intraday losses. This resulted in hammer type candle, indicating buying interest at lower levels.
* Key point to highlight is that index witnessed buying interest in the vicinity of lower band of the rising channel and 161.80% extension of (25669-25332-25548) indicating inherent strength. Volatility is expected to remain heightened due to the ongoing earnings season and uncertainties related to tariff developments. However, strong support is placed at 24,800 levels. Given this backdrop, any dip from hereon should be approached selectively, focusing on fundamentally sound companies with proven earnings strength. A decisive close above the previous session’s high would warrant a pause in the down move, with potential for a gradual recovery toward 25,800 over the coming month.
* Key Monitorable which will dictate the further course of action:
* a. All eyes will be on outcome of US-India bilateral trade deal coupled with progression of Q1FY26 earning season which will dictate the further course of action.
* b. Falling US Dollar index would act as boon for equities that would eventually result into FII's inflow.
* c. India VIX is closed below 12 last week which is near 10-month low, indicating participants anxiety at lowest level.
* Structurally, the formation of higher peak and trough while absorbing host of negative news around geo-political uncertainties coupled with clarity of trade tariff. Further, strong market breadth depict strength as currently 60% stocks of Nifty 500 universe are trading above 200-days SMA compared to last month's reading of 52% that bodes well for durability of ongoing structural up move.
* The formation of higher-high-low makes us maintain our support base at 24800 for the Nifty which is based on 50% retracement of recent rally (23936-25669) and 50-day EMA.
Nifty Bank : 56765
Technical Outlook
Day that was..
* The Bank Nifty paused the three -day losing streak despite ambiguity over the India -US trade agreement and closed the day at 56765 , up 0 .02 % . The Nifty Pvt Bank index closed on a flat to negative note, and ended at 28 ,060 .70 , down 0 .05 % .
Technical Outlook :
* The Bank Nifty started the week on flat note where after the initial upmove index faced resistance near 61 .80 % retracement of the Friday’s session and witnessed profit booking during first half of the session however buying demand emerged near Friday’s session low which helped index to erase most of the intraday losses and closed flat this resulted in a Doji candle formation indicating pause in the down move .
* Key point to highlight is that Index witnessed supportive efforts in the vicinity of two -month rising trendline and 20 -day EMA which it held since April, signaling the bull market template is intact . This, coupled with positive market breadth, supports the ongoing higher -high -low structure, underscoring a well -established uptrend . Any decisive close above the previous session high would open the gates towards 58800 levels in coming quarter which is the implied target of the consolidation from (56098 -53483 ) . The support base is maintained at 55 ,500 , which represents the 50 % retracement of (53 ,483 –57 ,628 ) and aligns with the 50 -day EMA . Consequently, any dip from current levels could offer fresh buying opportunities .
* Outperforming the benchmark, PSU bank paused it four -session losing streak and closed above previous sessions high , indicating inherent strength . After breaking out from an eleven -month falling trendline on 19th May, the index has maintained a higher -high -low structure on the weekly chart, signaling an intact uptrend . While Bank Nifty trades below ~ 2 % from its all -time highs, the PSU Bank index remains about 14 % below its all -time high, presenting a compelling case for a catch -up move . Immediate support on the downside is placed at 6 ,700 , which is the recent swing low and coincides with the 20 -week EMA .
* Structurally, Bank Nifty is undergoing phase -wise expansion, with each rally establishing new price zones of acceptance . Instead of sharp directional moves, the index is progressing through brief consolidations that serve as launchpads for subsequent advances . This transition from volatility -driven swings to range -bound bases suggests increasing market maturity, with demand emerging at higher levels . The narrowing amplitude of corrections indicates that stronger hands are absorbing supply, maintaining trend continuity .
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