Indian equity benchmarks closed on a negative note amid heightened geopolitical conflict in Middle East- ICICI Direct
Nifty :24972
Technical Outlook
Day that was
* Indian equity benchmarks closed on a negative note amid heightened geopolitical conflict in Middle East. The Nifty settled at 24972 down 0.56%. Despite weak global cues Midcap and Small cap indices closed on a positive note 0.36% and 0.70% respectively. Sectorally, Media, Consumer Durable and Metal outperformed, while, IT, Auto and FMCG underperformed.
Technical Outlook:
* Nifty started the week on a weak note as it gap down from Friday’s close, after the initial down move index moved up making higherhigh-low and recovered some of the intraday losses. This resulted into the formation of Inside bar, signaling range bound trading
* Nifty set for strong start with a gap up opening amid potential IsraelIran ceasefire and 13% decline in crude from Monday’s top of $80 which is sentimentally positive. Key point to highlight is that, despite the geopolitical issues supportive efforts emerged in the vicinity of 20-Day EMA and 80% retracement of the Friday’s move indicating indicating uptrend is intact. Going ahead, we expect volatility to remain elevated tracking geopolitical worries coupled with monthly expiry session, wherein holding 24500 would keep broader uptrend intact. Further, de-escalation of geopolitical concern along with cool off in crude oil prices would fuel the momentum to head towards 25500 in coming weeks.
* Over past five weeks, Nifty has been consolidating in 700 points range wherein it managed to defend the 24500 on multiple occasions despite escalated geopolitical issues. Further, index heavy weights regained upward momentum as RBI eased project financing norms that boosted market sentiment. Historically, we have observed that such geopolitical scenarios result into near term volatility wherein possibility of knee-jerk reaction cannot be ruled out. Hence, we advise dips should be capitalised to buy quality stocks from medium to long term perspective.
* Structurally, the index is witnessing shallow retracement as over past five weeks it merely corrected 3% of preceding six week's rally (15%), indicating robust price structure that is helping index to set the stage for next leg of up move.
* On the broader market front, the Nifty midcap index has taken a breather after 28% rally off April low and now approaching lower band of rising channel that coincided with 50 days EMA. In addition, since April lows, Midcap index has not corrected >6% while on the weekly chart it has not closed below its previous week’s low. In current scenario, despite ongoing volatility, midcap index has been maintaining the same rhythm.
* The key support threshold of 24500 for the Nifty is based on lower band of past five weeks consolidation coincided with 50% retracement of recent rally (23935-25222) and 50-day EMA.
Nifty Bank : 56059
Technical Outlook
Day that was :
* The Bank Nifty closed on a negative note, amid heightened geopolitical conflict in Middle East . The index settled at 56 ,059 , down 0 .34 % . The Nifty Pvt Bank index mirrored the benchmark, closed on a negative note at 27931 , down 0 .17 % .
Technical Outlook :
* The Bank Nifty started the week on a negative note with a gap down, after the initial down move, index moved up making higher -high -low and filled the gap to close above the psychological mark of 56000 and made a Inside bar, signaling range bound activity .
* Bank Nifty is expected to open higher on June 24 , buoyed by easing geopolitical tensions after a potential Iran and Israel ceasefire . Oil prices fell sharply declined 13 % from Monday’s top of $80 indicating positive momentum to continue . The index is forming higher base in the vicinity of 20 days EMA since April in Monday’s session it witnessed buying demand at 20 -day EMA and 61 .80 % retracement of the Friday’s up move, highlighting strength that would open the door towards the upper consolidation which is placed at 57049 . While, strong support is placed at 55000 , which coincides with lower consolidation zone . Any, decline from current levels would offer incremental buying opportunities . Key point to highlight is that, over past five weeks Bank Nifty has managed to close above last week’s low . In current scenario, despite ongoing geopolitical worries it has maintained the same rhythm by closing above its last weeks low, indicating uptrend is intact .
* Structurally, the Bank Nifty is witnessing an elongation of rallies followed by shallow retracements, signifying a robust price structure . The April months up -move of 14 % is stronger compared to the March month’s 9 % rise . Additionally, the declines are becoming shallower, with the April months decline being 4 . 6 % versus 5 . 4 % in March 2025 after recent 7 % upmove and decline of 3 % we expect same rhythm to continue .
* Outperforming the benchmark the PSU Bank index witnessed buying demand in the vicinity of 61 .80 % retracement of the move from (6709 - 6899 ) indicating buying demand emerged at lower levels . The index broke out from an eleven -month falling trendline on 19th May and, since then, has been forming a higher -high -low structure on weekly which is intact, indicating uptrend is intact . While the Bank Nifty is trading ~ 1 % below its all -time high, whereas the PSU Bank index is still trading ~17 % below its all -time high, presenting a compelling case for a catch -up move . Meanwhile, immediate support on the downside is placed at 6 ,700 , which is the 38 .20 % retracement of the rally from 7th April 2025 to 9th June 2025 coincided with 50 -day EMA .
Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631
