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Nifty :25722

Technical Outlook

Week that was…

Equity benchmark concluded eventful week on a flat note at 25722 amid elevated volatility tracking tariff development. Midcaps outshone benchmark by gaining 1% lead by PUS Banks, Oil& Gas and Metal stocks.

Technical Outlook:

* Nifty started the week on a positive note and witnessed profit booking from the previous week high. As a result, The weekly price action formed a small bear candle with long upper shadow, highlighting profit booking at higher levels.

* Key point to highlight is that, The index has undergone healthy consolidation over second consecutive week as profit booking in recently rallied large caps, resulted into breather at psychological mark of 26000 amid overbought condition tracking past four weeks >1500 points rally. Meanwhile midcaps regained momentum with improved market breadth We believe, current breather offers incremental buying opportunity to ride next leg of up move towards All Time high of 26300 in the coming month. The ongoing consolidation (26100-26700) is a part of the prevailing structural up trend. Hence, focus should be on accumulating quality stocks on dips backed by strong earnings as key support is placed at 25400 being 50% retracement of recent up move coupled with one year downward sloping trend line breakout area at 25400.

Our positive bias is further validated by following observations:

* While sectors like private banks, auto, IT have paused for a breather, momentum is shifting towards, Metal, PSU Banks, Oil & Gas. This sectoral rotation signals a constructive baton change that could help in durability of ongoing uptrend amid global volatility, evolving tariff development and ongoing earnings season.

* Mirroring the Nifty, Midcap index resolved out of one year downward slanting trend line, indicating resumption of uptrend after one year hiatus. Amidst ongoing consolidation, market breadth has seen improvement as currently 62% stocks of Nifty 500 are trading above their 200 days EMA compared to one month rolling average of 56, indicating improvement in broader market participation.

Key Monitorable for the next week:

* Monthly Auto sales numbers

* FII's have turned positive after three months sell-off. Continued buying spree would boost market sentiment

* Development on India-US tariff negotiations

* Progression of Q2FY26 earning season

* On expected lines, Gold has taken a breather amid overbought conditions. We expect gold to undergo healthy consolidation in $4400- $3700 range

Intraday Rational:

* Trend- Undergoing healthy retracement

* Levels: Buy near 50% retracement of previous up move (25,123-26,285)

Nifty Bank : 57776

Technical Outlook

Week that was:

Bank Nifty concluded the volatile week with a minor gain to close at 57,776 up 0.13%. The Nifty PSU Bank index has relatively outperformed the benchmark, ending the week on a strong footing note at 8,184 up 4.69%

Technical Outlook:

* Bank Nifty started the week on a positive note and witnessed profit booking near the previous week’s high. Index has oscillated with in its previous week range throughout the session, as a result, the weekly price action formed a Doji candle, indicating breather after recent up move.

* Key point to highlight is that, index has undergone healthy consolidation over second consecutive week as profit booking in recently rallied private banks, has led to a brief pause amid overbought condition following last four weeks 4300 gains. Meanwhile PSU banks has relatively outperformed the benchmark, indicating sectoral rotation accompanied by a constructive consolidation phase. Meanwhile, momentum indicators such as RSI in both weekly and monthly timeframe continue to sustain above the 60 reading, indicating bullish view intact. Hence, focus should be on accumulating quality stocks on dips backed by strong earnings as 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 twomonth 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 twomonth 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 strong 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. Going ahead, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 7,700, which aligns with the 38.2% retracement of the latest upswing (6,730–8,272)

Intraday Rational:

* Trend- Undergoing healthy retracement

* Levels: Buy near 50% retracement of previous up move (56,727-58,830)

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