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Nifty : 23416

Technical Outlook

Day that was..

The Nifty concluded the volatile session on a flat note ahead of the RBI policy, at 23416. Market breadth remained in favour of advances as broader markets endured its outperformance wherein Nifty midcap and smallcap gained 0.50%. Barring IT and Metal, all major indices ended in green lead by Consumer Durables, pharma and PSU Banks

Technical Outlook:

• Index failed to capitalized initial ~200 points recovery, consequently traded within last sessions trading range for rest of the session. The daily price action resulted into a small bull candle while forming a higher low, highlighting buying demand at elevated support base.

• The index has been witnessing supportive efforts from the 61.8% retracement of April 2026 11% rally. However, it is important to highlight that over past seven sessions index has failed to close above the previous sessions high. Thereby, post RBI policy sustainability above previous session high (23465) would result in resumption of uptrend that can drive Nifty towards 23800 mark. Failure to do so would result into prolongation of consolidation wherein strong support placed at 23100.

• Index is undergoing slower pace of retracement over past six weeks, highlighting healthy consolidation that sets a strong foundation for next leg of up move. Hence, investors should utilize this volatility to accumulate quality stocks backed by strong earnings growth. Our constructive bias on the index is based on following observations:

• A) Bank Nifty continues to showcase outperformance by forming a higher high-low formation, highlighting early sign of recovery.

• B) Broader market continues to outperform the large caps as evident by rising ratio line of Nifty 500 vs Nifty 100

• C) Seasonality favours traction in the broader market as historical data suggest that over the past decade, both the Nifty Midcap and Smallcap indices have closed in the green in 7 out of 10 instances, generating an average gain of 2.5% and 3.5%, respectively during this period. Hence, we expect stock-specific activity likely to continue in the Mid and Smallcap space.

Key Monitorable:

• Any de-escalation on the geopolitical front would lead to a cool-off in crude prices, which would eventually be positive for the Indian equities

• The India has been relatively underperforming its global peers driven by AI lead rally. However, currently key outperformers like Nasdaq, Kospi, Taiwan are witnessing negative divergence on the daily chart, indicating possibility of profit booking can not be ruled out which would eventually help to regain the interest in the Indian market

Intraday Rational:

• Trend – Prolongation of consolidation in 23800-23100 range over fourth consecutive week

• Levels – Buy around 61.8% retracement

Nifty Bank : 54332

Technical Outlook

Day that was:

Bank Nifty Index closed on marginally positive note at 0.3% at 54332 ahead of RBI monetary policy on Friday. Nifty PSU Bank again relatively outperformed for the day gaining 0.45%.

Technical Outlook:

• Index opened on negative note and thereafter found supportive efforts emerging from 38.2% retracement of previous days up move .The daily price action resulted into bull candle with higher high higher low indicating buying demand from lower levels.

• Key point to highlight is that Index witnessed positive follow through thereby reaffirming support from 61.8% retracement support . In todays session we expect volatility to remain elevated on back of RBI monetary policy, hence any positive outcome will fuel the upward momentum or failure to do so will lead to consolidation. Going ahead, we expect pullback options to remain open till 55500 levels being 50-day EMA which has been acting as resistance over past 27 sessions and last weeks high.

• Structurally, index is witnessing slower pace of retracement as over past 6 weeks it retraced 61.8% of 3 week rally. Indicating healthy consolidation that would set the stage for next leg of rally.

• Nifty PSU Bank relatively outperformed forming bull candle with higher high higher low and closed above its previous session high for third consecutive session. Sustainibilty above 52-week EMA and 3 session high would set the stage for next leg of up move towards 8600 levels being 61.8% retracement of current decline(9095-7800)

Intraday Rational:

• Trend- Index has been consolidating in 55000-52800 over past four weeks

• Levels- Buy around 61.8% retracement of yesterday range

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