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Nifty :23998

Technical Outlook

Week that was.. Geopolitical tensions continued to dampen the market sentiment. Yet Nifty managed to sailed through the volatility and settled the truncated week at 23,998, up 0.4%. While the benchmark remained stagnant, the broader market showed resilience; Midcap and Small-cap indices outshone the frontline index with gains of 0.8% and 2.4%, respectively. Performance across sectors was mixed, with Pharma, Oil & Gas, and IT emerging as top performers, while Financials faced profit booking

Technical Outlook:

* The spike in crude oil prices weighed on market sentiment consequently putting pressure on Indian Rupee. As a result, index pared intra-week gains and majorly traded in last week’s range. The weekly price action formed a bull candle with shadows on either side, indicating extended breather amid elevated volatility.

* Index is likely to open with a gap-up tracking easing geopolitical tension. Going ahead, we expect prolongation of healthy consolidation within the 23,400-24,500 range. This sideways movement would help index to cool off overbought conditions seen post 11% rally off April low of 22181 and aid index to find sustainable base amidst global uncertainty that would eventually pave the way for next leg of up move

* Thereby, we view the current retracement as a healthy consolidation rather than a trend reversal. Investors should utilize dips to accumulate high-quality stocks with strong Q4 earnings as strong support is firmly placed at 23,400, which aligns with the 61.8% Fibonacci retracement of the recent rally (22,182–24,601) and the gap area of 23,555–23,154 recorded on 8th April.

* We expect stock-specific activity will continue backed by ongoing corporate earnings season while monitoring geopolitical volatility. A decisive close above the 24,500 mark is essential to trigger the next leg of up move

* The Nifty 500 vs. Nifty 100 ratio chart has shown significant improvement after establishing a higher base above a multi-year breakout level. This trend suggests that the broader market is poised to outperform the large caps, signaling broadening of the rally going ahead.

* Despite global volatility, the market breadth has been holding sturdy after showing significant improvement as the current reading of % stocks trading above 50- and 200-days SMA has jumped to 72% and 42% compared to last month reading of 15%, signaling broadening of rally that bodes well for durability of ongoing up move

Key Monitorable:

A. Development on geopolitical conflict

B. Assembly election outcome

C. Crude Oil Intraday Rational:

* Trend – Basing in the vicinity of 20-day EMA with positive bias

* Levels - Buy around Thursday close

Nifty Bank :54863

Technical Outlook

Week that was:

The Bank Nifty Index extended losses over second consecutive week tracking mixed global cues and settle at 54863 down 1.8%. Nifty PSU Bank relatively underperformed, down 3.5%.

Technical Outlook:

* Index started the week on a positive note, however lack of follow though buying eventually dragged index lower. The weekly price action resulted into bear candle with lower high lower low formation, indicating continuation of corrective bias.

* Key point to highlight is that, over past seven sessions, index failed to close above previous session high. The absence of follow through strength indicate near term weakness, resulting into continuation of corrective phase wherein strong support placed around 53700, being 50% retracement of entire April rally (49954-57456).

* Further, to pause the ongoing corrective move, a decisive close above previous session high (56178) would be required which can open the door for a meaningful pullback towards April high placed around 57500

* On the weekly charts stochastic oscillator is still in overbought territory with a reading of ~81 levels, indicating possibility of extended breather can not be ruled out that would make the markets healthier and set stage for next leg of up move

* Nifty PSU Bank relatively underperformed forming lower high lower low close below 20-day EMA indicating near term weakness. Sustainability above last week high will be important for revival in upward momentumm.

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