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Nifty : 24712

Technical Outlook

Day that was…

Indian equity benchmark ended on a negative note amid news of additional 25% US tariff on Indian goods and settled at 24712 down 1.02%. Market breadth was in favor of declines, with an A/D ratio of 1:3 where broader markets underperformed the benchmark. Both midcap and small cap indices underperformed the benchmark and closed on a negative note, 1.62% and 2.03% respectively. Sectorally, Barring FMCG all indices closed on a negative note, where Realty, PSU bank and Metal were the laggards.

Technical Outlook:

* Nifty opened with a gap down and on the breach of previous week low selling accelerated on the down side which dragged index below 50-day EMA, the daily price action resulted in bear candle, indicating profit booking at higher levels.

* Key point to highlight is that, Nifty entered into the gap zone of (24673-24852) coinciding with 61.80% (24649) of the recent rally and 100-Day EMA (24634). Hence, 24600 will act as immediate support. Going ahead to pause the current down move index need to close above previous sessions high failing to do so index will continue to consolidate in the range of 24400-25000. However, a decisive close and follow through buying above 25000 will fuel the upward momentum.

* We expect volatility to pick up tracking tariff development, monthly expiry and GDP numbers. Hence, focus should be on accumulating quality stocks backed by strong earnings, especially those poised to benefit from next-generation GST reforms and upcoming festive season as we believe strong support is placed at 24400 level.

* On the structural front, market appears to be absorbing host of negative news around tariff as well as geopolitical issues coupled with FII’s continuous sell-off, wherein Nifty has managed to defend 24500 on a weekly closing basis (over past 3 months), highlighting strong higher base formation that bodes well for next leg of up move.

* On the market breadth front the % of stocks above 50 days SMA (Nifty 500 Universe) has bounced to 32% from past two weeks reading of 25%. Historically, buying in such scenario has garnered decent returns in subsequent months.

* Key monitorable to watch out for in current volatile scenario:

a) Development of Bilateral trade deal negotiations.

b) US and India GDP

Nifty Bank : 54450

Technical Outlook

Day that was:

Bank Nifty closed on a negative note and settled at 54,450 (-1.25%). Nifty Pvt Bank index mirrored the benchmark, ending the day at 26,340(- 1.33%).

Technical Outlook:

* Bank Nifty open the day with a gap down and witnessed a selling pressure throughout the session in the formation of lower-low-high pattern, which resulted in a formation of bear candle.

* The daily price action resulted into extended corrective phase on the breach of the rising trendline and closing below 100-day EMA, which had held firm since April 2025, indicating pause in upward momentum.

* Key point to highlight is that, bank nifty is in corrective phase from past eight weeks, which resulted in Stochastic oscillator entering in oversold territory on both the daily and weekly chart, with reading of 4 and 9, indicating that the corrective phase approaching exhaustion and a potential rebound could emerge in the near term. Thus, investors should refrain from aggressive selling at current level. Further, with strong confluence support placed near 53,500 marked by the 200-day EMA, the polarity principle of prior resistance turning into support, and the 61.8% retracement of the 51,860–57,630 rally. Sustaining above this level (53500) could set the stage for a potential rebound, opening the possibility of a recovery toward previous support of 54900 in the near term, and follow-through strength above this level would further strengthen momentum and pave the way for the next leg of the uptrend towards the 55,800-56,400 mark.

* Structurally Since April, intermediate corrections have remained shallow while the index has consistently held above its 100-day EMA. Moreover, over the past eleven weeks, the index has retraced 50% of the preceding up move from 51863 to 57614 (11%) in the previous six weeks, indicating a slower pace of retracement with a robust price structure, that augurs well for the next leg of the uptrend.

* PSU Bank Index has underperformed the benchmark and closed lower. Moreover, the index has formed a higher-highs (as per Dowtheory) over the past twelve sessions. The index has retraced close to the 38.2% level of its preceding 20% rally from 6,052 to 7,250 and rebounded above 7,000 mark, suggesting renewed strength, while the Bank Nifty consolidates within 6% of its all-time high, PSU Banks continue to lag significantly, trading 15% below their peak. This presents a potential catch-up opportunity for the sector.

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