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Nifty :26186

Technical Outlook

Week that was…

Index extended consolidation in the vicinity of All Time High over third consecutive week and settled the week on a flat note at 26186 as deprecating rupee weighed on the market sentiment. Broader markets notably lagged, with Midcaps down 0.80% and Smallcaps slipping 2%. Sectorally, beaten-down IT stocks roared back by gaining >3% coupled with traction in auto and metal stocks while PSU banks took a much-needed breather

Technical Outlook:

* Consequently, weekly price action formed a small bear candle with lower shadow, highlighting elevated buying demand.

* The elevated buying demand from 20 days EMA coincided with 10 weeks rising trend line is reaffirming the market’s underlying strength that would pave the way to challenge All Time High of 26300. RBI’s dovish stance boosted market sentiment that helped index to recoup intra-week losses amid depreciating rupee. A decisive breakout above 26,300 could recharge the rally and set the stage for 26,800 in the coming weeks.

* The lack of follow through strength above 26300 would result into prolonged consolidation in 26300-25700 range amid elevated volatility ahead of upcoming Fed policy and inflation print. Hence, dips should be utilized to accumulate quality stocks as key support is placed at 25700 as it is 61.8% retracement of Nov-Dec rally (25318-26325) coincided with 50 days EMA.

* Mirroring the benchmark move, Nifty midcap index has been consolidating after clocking a fresh All Time High. The ratio chart of Nifty Midcap vs Nifty 500 has formed a cup & handle pattern. Breakout would confirm outperformance of midcap stocks with Nifty 500 universe in the coming weeks

Key Monitorable for the next week:

* US–India Trade Talks: A visiting US trade delegation may unlock breakthroughs. A positive outcome could boost market sentiment and possibly bring FIIs back

* Fed Rate Decision

* India CPI Print

* US Dollar Index: Breakdown from 10 weeks rising channel confirms resumption of decline in US Dollar index. Follow through weakness bodes well for emerging markets

* Rupee Watch: Indian Rupee is approaching upper band of 7 years rising channel, indicating impending trend reversal which would help to revive the market sentiment

* Intraday Rational:

* Trend- Supportive efforts in the vicinity of 20-day EMA with Higher-highlow formation from past three consecutive session.

* Levels: Buy on declines near 80% retracement of Fridays upmove(26152- 26200).

Nifty Bank : 59777

Technical Outlook

Week that was:

Bank Nifty extended its winning streak for the sixth consecutive week, closing at 59735,(0.03%). The Nifty Private Bank Index echoed this strength, ending the week at 28,848, underscoring the sustained leadership of banking stocks in the ongoing market uptrend

Technical Outlook:

* Bank Nifty opened the week on a positive note and strongly rebounded from 20-day EMA coinciding with rising channel suggesting buying demand at support base. The weekly price action formed a small bear candle with a higher-high, higher-low pattern for the sixth straight week, highlighting the prevailing strength of the trend

* Over the past 13 weeks, Bank Nifty has surged ~12%, clearly outperforming the 7.5% gain in the Nifty50 and reinforcing the sector’s strengthening leadership within the broader market. Going ahead, we expect the index to retain its higher-high, higher-low trajectory within the rising channel and move towards the revised target of 60,500 over the coming month.

* Momentum oscillators continue to reflect a bullish bias, while short and medium-term moving averages remain in a steady upward slope, validating the ongoing trend. Any temporary pullback should be treated as a buying opportunity in high-quality banking names, particularly those that delivered solid Q2 earnings, as immediate support is placed near 58,600, corresponding with the 50% retracement of the current advance (57,157–60,114).

* Historically, in the past two decades, there have been 17 instances where Bank Nifty delivered double-digit gains within four months after a decisive breakout above its previous two-month high. The current structure has once again confirmed such a breakout surpassing both the prior two-month high and the previous all-time peak (57,628), indicating a high-probability continuation setup for sustained upside momentum in the months ahead

* The PSU Bank Index has witnessed profit booking forming lower high lower low, after a 13-week higher-high, higher-low formation signaling halt in ongoing uptrend. The steep run-up has pushed stochastic indicators into overbought territory on weekly and monthly charts, raising odds of a nearterm consolidation. Nevertheless, pullbacks should be viewed as accumulation opportunities, with strong support around 7,900, aligning with the 38.2% retracement of the 6,730–8,665 rally and the 50-day EMA

* Intraday Rational:

* Trend- Supportive efforts in the vicinity of 20-day EMA with Higher-high-low formation from past three consecutive session

* Levels Buy on declines near 80% retracement of Fridays upmove(59556- 59680)

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