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Nifty : 26053

Technical Outlook

Day that was…

Equity benchmark closed the session on a positive note to settle at 26,063 up 0.45% tracking firm global cues. The broader market breadth turned positive with A/D ratio 2:1. Barring Auto, all other sector indices ended in the green, indicating broad-based buying participation, wherein, Oil & Gas and Metals remained in forefront.

Technical Outlook:

* Nifty started the session on a firm note and closed above the previous session’s high as intraday dips were bought into. As a result, the daily price action has formed a bullish candle carrying higher-high-low structure, suggesting continuation of the prevailing uptrend.

* Key point to highlight is that, index has close above the 26,000-mark for the first time since October 2024, while forming a higher base above its previous 12-month falling trendline breakout(25,500), indicating a structural improvement and strengthening of the medium-term uptrend. Going ahead, we reiterate index to resolve higher and challenge its all-time high 26,300 in coming month. Additionally, on the momentum front, the RSI in both weekly and monthly is sustaining above the 60 mark, indicating strong bullish momentum. Hence any dips from current level should be viewed as a buying opportunity to accumulate quality stocks with robust earnings as strong support is placed at 25,500-25600 being 38.2% retracement of the ongoing up move (24,587-26,104) and 20-day EMA .

Our positive bias is further validated by following observations:

* The Breakout from 3 months consolidation helped Bank Nifty to clock a fresh All Time High, highlighting structural improvement. While optimism around earning boosted sentiment in IT, Oil & Gas stocks. Together, these indices carry 55% weightage of Nifty

* The ongoing up move is supported by improving market breadth, as the ratio of stocks hitting new 52-week highs to lows in the Nifty 500 continues to rise, confirming a strengthening rally.

* The breakout from a 4-month range (25,670–24,350), led by index heavyweights, signals structural improvement and sets the stage for the next leg of the rally.

* Nifty Midcap Index has mirrored the benchmark and registered a breakout from its 13-month falling trendline and is now trading just 1% below its alltime high, indicating a broad-based participation in the ongoing market uptrend.

Key Monitorable for the next week:

* Outcome of India-US tariff negotiations

* Progression of Q2FY26 earning season

* Continuation of buying spree from FII’s

* 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- Higher high-low formation confirms positive momentum

* Levels: After a Gap down opening utilize declines towards 50% retracement of last 2 days up move (25820-26284) for Initiate long position

Nifty Bank : 58385

Technical Outlook

Day that was:

Bank Nifty closed the day on a positive note and settled at 58,385 up 0.29%. The Nifty Private Bank index has mirrored the benchmark, ending the day on a firm note at 28,473 up 0.29%

Technical Outlook:

* Bank Nifty started the session on a positive note, and recouped initial declines to closed above previous session high. As a result, the daily price action has formed a bullish candle carrying higher-highlow pattern, indicating inherent strength.

* Key point to highlight is that the index continued to maintain higher low formation for the fourth-consecutive session, while holding firm above its all-key moving average, indicating sustained bullish momentum and reinforcing the continuation of the primary uptrend. Meanwhile, momentum indicators such as RSI in both weekly and monthly timeframe is sustaining above the 60 reading, indicating strong bullish momentum. Hence, one should adopt a buy-on-dips strategy with immediate support placed near 56,900 representing the 38.2% retracement of the ongoing up move (54,226-58,577).

* Structurally, over the past two decades, there have been 17 instances where Bank Nifty, following a decisive breakout above its previous two-month 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 closed on a flat to positive note. Index is maintaining its higher-high-low pattern for the nineth-consecutive week and forming higher base above its previous all-time high level (8053). Going ahead, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 7,600, which aligns with the 38.2% retracement of the latest upswing (6,730–8,118)

Intraday Rational:

* Trend- Higher high-low formation confirms positive momentum

* Levels: After a Gap down opening utilize declines towards 50% retracement of last 2 days up move (57725-58830) for Initiate long position)

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