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Nifty : 23123

Technical Outlook

Day that was.. Equity Benchmark extended losses over second consecutive session tracking negative global cues and rise in crude oil prices. Nifty settled at 23123 down 1%. Market breadth was in favor of decline with an A/D ratio of 1:3. while broader markets underperformed, pushing the Nifty Midcap and Smallcap down 1.4% and 2%. Sectorally, Baring Pharma all major indices closed in negative while Metals and Realty were the top laggards.

Technical Outlook:

• The index began the week with a gap down and recovered in the first half from the 61.8% retracement of its 11% April rally. However, a lack of follow-through in the second half led to profit-booking. This daily price action resulted in an inverted hammer-like candle, highlighting a tug-of-war between bulls and bears.

• Going ahead, a sustained move and a higher high-low formation above the inverted hammer candle’s high (23267) in the following session will be the first sign that the downward momentum is ending. Meanwhile Stochastic in weekly time-frame has entered in to oversold territory with a current reading of ~15, indicating probability of reversal cannot be ruled out in near-term.

• Structurally, the index has been trading in a shallow falling channel since its 21st April 2026 peak of 24,601. The recent decline has brought the index to the channel's lower band, which aligns with the 61.8% retracement of the 11% April rally. Holding this support keeps a pullback option open toward the 24,000 level in coming weeks being upper band target of the channel. Failure to do so would result into extended correction wherein strong support is placed at 22700 being 80% retracement level of April up move. Our constructive bias on the index is based on following observations:

• Despite ongoing volatility Bank Nifty defended May lows and now showing early signs of structural revival

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

• Seasonality favours buoyancy in the broader market. Over the past one decade, June has been positive month for Nifty Midcap and Smallcap on 70% of the time that garnered average gain of 2.5% and 3.5%, respectively Key Monitorable: a) Inflation: Upcoming US and India inflation data. b) FII Inflows: Nasdaq, Kospi, Taiwan indices are witnessing negative divergence on the daily chart, indicating exhausted rally. The extended profit booking in these AI led indices may help to shift the FII’s interest from AI trade to growth oriented emerging markets like India c) The pair of USD/INR has seen good correction after RBI’s move of exempting FPI from tax on any interest and capital gains on investment in Indian Government Securities. Further decline would help equities to revive momentum d) Crude Oil: Any geopolitical de-escalation will cool oil prices, boosting Indian equities market

Intraday Rational:

• Trend – Formation of lower high-low signifies corrective bias

• Levels – Sell on pullback around 80% retracement

Nifty Bank : 54064

Technical Outlook

Day that was: Bank Nifty Index snapped four days rally and closed on negative note at 0.9% at 54003 on back of weak global cues.. Nifty PSU Bank also underperformed for the day losing 0.9%.

Technical Outlook:

• Post gap-down opening Index found supportive efforts from 61.8% retracement of last three days up move (53027- 54865) indicating buying demand from lower levels. The daily price action resulted into bull candle with similar open and low indicating support around 53800 levels.

• Over past one month index has been facing resistance at 50- day EMA. We believe close above 50-day EMA that coincides with falling trendline placed near Fridays high would be important to watch out for as it would open door for pullback rally towards 56,300 coinciding with previous swing high aligning with 200-day EMA and 80% retracement of recent decline (57456-52783)

• Structurally, we have seen Index has witnessing slower pace of retracement as over past 6 weeks it retraced 61.8% of 3- weeks rally. Indicating healthy consolidation that would set the stage for next leg of rally.

• Nifty PSU Bank also snapped 4 days up move forming lower high lower low indicating profit booking. Follow through strength above last week high will lead to pullback towards 8600 levels being 61.8% retracement of current decline(9095-7800)

Intraday Rational:

• Trend- post ~1800 points recovery in past 4 session, index witnessed healthy profit booking, indicating short-term breather

• Levels- Buy around 80% retracement of 3 days upmove

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