IGI Logo

Nifty :24826

Technical Outlook

Day that was…

Indian equity benchmarks snapped two days winning streak and settled Tuesday’s session at 24826, down 175 points or 0.7%. Broader market relatively outperformed as Midcap & Smallcap Index closed marginally in green. Sectorally, PSU Bank, realty, pharma relatively outperformed while FMCG, auto, IT underwent profit booking

Technical Outlook

* The Nifty concluded highly volatile session on a subdued note wherein it oscillated by 940 points. As a result, daily price action formed a bear candle with shadows on either side, indicating breather after past two sessions up move.

* The past two weeks healthy consolidation in the broader range of 25100- 24500 range has helped index to cool off the overbought conditions while sustaining above 20 days moving average. The formation of higher peak and trough on the larger degree chart exhibits inherent strength that makes us reiterate our positive bias and expect Nifty to eventually resolve above 25100 and gradually head towards 25500 in coming month. In the process, we expect volatility to remain elevated ahead of monthly expiry session. Hence, any dip from hereon should be used as buying opportunity as strong support is placed at 24200-24400 zone.

* The key point to highlight amid ongoing consolidation is that the broader market has been showing resilience and gradually witnessing improvement in market breadth. As currently, 85% stocks of the Nifty 500 universe are trading above their 50 days EMA compared to last months reading of 65%. In addition to that, we believe the midcap and small cap index has been maintaining the rhythm of staging a strong recovery after approaching maturity of bull market corrections of 27% and 29% while time wise such correction lasted for 7-8 months.

* Structurally, past three months gradual up move has helped benchmark to regain some of its lost ground and now Nifty is just 5.5% away from its All Time High. In comparison to that, the small cap index is still 11% away from its All Time High. The current resilience in the broader market coupled with improving market breadth makes us believe that broader market will witness catch up activity and continue to outperform in the coming month.

* Following are the key monitorables from global perspective which would act as tailwind going ahead: a. The US Dollar index is on the verge of breakdown from two years low of 99.50 b. Weakness in Brent crude oil persists at higher levels , currently hovering around 64 c. Bilateral Trade Agreement between India and US The formation of higher peak and trough signifies structural uptrend that makes us revise support base at 24500 as it is 50% retracement of recent rally (23935- 25116).

Nifty Bank : 55352

Technical Outlook

Day that was :

The Bank Nifty extended breather over second consecutive session and settled at 55352 , down 0 . 4 % . The Nifty PSU Bank index remained outlier as it gained 0 .26 % to conclude the session at 6732

Technical Outlook :

* The index staged a strong recovery after initial decline . However, failed to sustain at higher levels . Consequently, settled a session on a flat to negative note . The daily price action formed a High wave like candle with upper and lower wick, signaling elevated volatility while sustaining above 20 days EMA

* The Bank nifty index has been undergoing healthy retracement over past six weeks . The shallow retracement after 14 % rally seen during April signifies that the higher base has been set for the next leg of up move towards 57000 in the coming months, as it is the external retracement of the fall from 56 ,098 –53 ,483 . Meanwhile, strong support is placed at 54 ,000 , which is the 80 % retracement of the recent up -move (53 ,483 –55 ,499 ) and coincides with the gap area witnessed on 12th May (54 ,055 –54 ,442 ) . Hence, any decline from hereon would offer incremental buying opportunity

* Structurally, the Bank Nifty is witnessing elongation of rallies followed by shallow retracements, which signifies a robust price structure . The recent up -move of 14 % is larger compared to the previous month’s 9 % rise . Additionally, the declines are getting shallower, with the recent one being 4 . 6 % versus 5 . 6 % in March 2025 . Furthermore, the index broke out of an eight -month falling trendline and surpassed its lifetime high, highlighting a robust structure .

* At current juncture, PSU Banks are placed at favourable risk reward setup and we expect catch up activity in this space against private banks . The index rebounded from the vicinity of 20 -day EMA and closed positive for the day, indicating buying demand at lower levels . Further, follow through strength above 6800 level will open the gate towards December swing high of 7250 . Meanwhile, immediate support on the downside is placed at 6400 , being the placement of 200days EMA

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

SEBI Registration number INZ000183631