IGI Logo

Nifty :24946

Technical Outlook

Week that was…

• Indian equity benchmarks snapped two day fall and closed on a positive note. The Nifty settled at 24946 up 0.92%. Market breadth was in favor of advances, with an A/D ratio of 1:1 where broader markets mirrored the benchmark. Sectorally, all sectors closed in green, where IT, Realty and Oil & Gas outperformed

Technical Outlook:

* Nifty started the week on a strong note halting two-day decline making higherhigh-low throughout the session where intraday dips were bought into. This led to the formation of green candle, signaling pause in the down move.

* Once again index managed to defend the 24500 over fourth occasions in past four weeks and staged a strong recovery. Going ahead, we expect volatility to remain elevated tracking geopolitical worries. Hence, de-escalation of geopolitical worries coupled with cool off in crude oil prices and US Fed policy would help index to resolve above upper band of consolidation placed at 25200 and eventually head towards 25500 in coming weeks. Meanwhile, 24500 would continue to act as key support

* In the last four decades there have been six major geopolitical escalations. On each occasion it formed major bottom once anxiety around the event settled down. Investing in such panic reactions with long term mind set has been rewarding as index has witnessed double digit returns in subsequent three months. In the current scenario, post the kneejerk reaction, we believe market would stabilise. Hence, we advise dips should be capitalised to build quality portfolios from medium to long term perspective.

* Structurally, the elongation of rallies followed by shallow correction is a perfect recipe of bull market. In current scenario, over past 21 sessions index has retraced merely 23.6% of preceding 25 sessions 16% up move. Slower pace of retracement indicating robust price structure that bodes well for next leg of up move

* On the broader market front, Nifty midcap is undergoing healthy retracement after 28% rally which should be used as buying opportunity based on following observations:

* a) Since April low, 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.

* b) Further, the ratio chart of Nifty 500/Nifty 100 has been inching upward that clearly indicates relative outperformance

* c) Improving market breadth as currently 60% of stock are trading above 200 days SMA compared to last month reading of 30%

* Key monitorable which would provide cushion to the ongoing up move:

* a) Development of geopolitical concern

* b) US Fed Policy

* c) Brent crude is poised at immediate hurdle of $78. Lack of follow through strength would result into consolidation in 78-66 levels

* d) Despite current decline, Index VIX is trading below immediate hurdle of 16

* e) Further weakness in US Dollar index

* f) Bilateral Trade Agreement between India and US

* The key support threshold of 24500 for the Nifty is based on lower band of past four weeks consolidation coincided with 50% retracement of recent rally (23935-25222) and Friday’s panic low is placed at 24473.

Nifty Bank : 55945

Technical Outlook

Week that was :

* The Bank Nifty snapped its four days decline and closed on a positive note . The index settled at 55 ,945 , up 0 .75 % . The Nifty Pvt Bank index relatively outperforming the benchmark, closed on a positive note at 27765 , up 0 .86 %

Technical Outlook

* The Bank Nifty started the week on a strong note, breaking a four - day decline making higher -high -low to close the session near days high and made a green candle, signaling pause in the down move .

* Bank Nifty reclaimed its 20 -day EMA and closed above it indicating inherent strength . The Friday’s gap -down move got arrested in the vicinity of 50 % retracement of the move from (53483 -57049 ) and in Monday’s session index witnessed follow - up buying indicating, pause in down trend . To resume the uptrend the index, need to decisively close above immediate hurdle of 57049 if closed and sustained above it then the gates are open for the implied target of the consolidation range 58800 which coincides with upper band of the rising channel . Meanwhile, on account of breach of 55149 which is panic low of Friday strong support is placed at 54500 , which 50 -day EMA coincides with consolidation zone . Any, decline from current levels would offer incremental buying opportunities .

* 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 we expect same rhythm to continue where the current decline should be seen as buying opportunity .

* Underperforming the benchmark the PSU Bank index witnessed green candle with lower wick and closed on a positive note . The index broke out from an eleven -month falling trendline on 19th May and, since then, has been forming a higher -high -low structure which is intact, indicating strong upside momentum . While the Bank Nifty is trading near all -time high, the PSU Bank index is still trading ~16 % 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 7 th April 2025 to 9 th June 2025 .

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631