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Nifty : 25542

Technical Outlook

Day that was…

* Indian equity benchmarks traded lackluster and closed at 25542 up 25 points. Broader markets underperformed the benchmark. Midcap and Small cap indices closed on a flat to negative note. Sectorally, FMCG, IT and Realty underperformed, while, PSU Bank, Oil & Gas and Metal outperformed.

Technical Outlook:

* Nifty started the day on a flat note, however, profit booking in the vicinity of 61.80% retracement of the previous session capped the upside and traded within 90 points range throughout the session. This resulted into the formation of Inside bar, indicating breather after recent upmove.

* Key point to highlight is that, Index is still sustaining above the break out levels of last week indicating pause after last week run up. Index is majorly sustaining above 20-day EMA since April indicating a strong uptrend. Going ahead, after couple of days breather, we expect Nifty to resolve higher and head towards 25800 and gradually pave the way towards Alltime high in coming quarter. From seasonality perspective, July has been the favourable month for Nifty since 1991, 71% of the time returns have been positive with an average of 2.5%. Volatility along the way should be used as a buying opportunity as we expect Nifty to hold key support of 24900.

* Structurally, despite geopolitical worries index maintained its higher highlow formation wherein Nifty has merely corrected 3% and now witnessing acceleration of upward momentum. Past four decades history suggest that knee-jerk reactions during geopolitical escalation offers good investment opportunity for medium term perspective rewarding with double digit returns in subsequent three months. We expect, index to maintain the same rhythm.

* On the broader market front, the Nifty midcap and small cap indices have resumed uptrend after two weeks breather and now just 2-3% away from their life time highs. Meanwhile, northward inching ratio of Nifty 500 / Nifty 100 makes us believe that broader market would continue with its outperformance. Further, current rally is backed by the sturdy market breadth as currently 78% stocks of Nifty 500 universe are trading above their 50 days SMA while 60% of stocks are sustaining above their 200 days SMA, highlighting inherent strength.

*  Our positive bias is further validated by following observations:

* 1. Outperformance of Bank Nifty continued as it inched upward and clocked fresh All Time High.

 * 2. Easing of geopolitical tension has resulted into decline in crude oil prices.

* 3. US Dollar index is sustaining below past two months low of $98 which augurs well for FII’s inflow in emerging markets.

* 4. Bilateral Trade Agreement between India and US.

* We maintain our support to 24900 for the Nifty and is based on 61.8% retracement of recent rally (24473-25654) and 20-day EMA.

Nifty Bank : 57459

Technical Outlook

Day that was..

* The Bank Nifty traded on a positive note as PSU Bank second day winning streak helped the index to settle at 57 ,459 , up 0 .26 % . The Nifty Pvt Bank index underperformed the benchmark, closed on a flat to positive note at 28288 .95 , up 0 .12 % .

Technical Outlook

* Bank Nifty started the day on a flat to positive note, however, index witnessed mild profit booking near previous sessions open during first half of the session where buying demand witnessed in the vicinity of 61 .80 % retracement of the move from (56994 -57614 ) recovering most the of intraday losses, resulting in a hammer type candle, suggesting supportive efforts at lower levels .

* Key point to highlight is that, Index is still sustaining above the break out levels of last week indicating pause after a recent upmove . Index is trading above its key moving averages indicating a strong uptrend . After the outperformance of private banks and now taking breather, PSU Banks would relatively outperform, helping the index to maintain the higher -high -low structure coupled with positive market breadth it would open the gates towards 58800 levels in coming quarter which is the implied target of the consolidation from (56098 -53483 ) . We maintain our support base at 55500 , which is 80 % retracement of (55149 -57263 ) . indicating uptrend is intact . Any, decline from current levels would offer incremental buying opportunities .

* After sixth day of winning streak which helped PSU Bank index outperforming the benchmark and closed on a strong note while making higher -high -low structure indicating robust price structure . 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 at all -time high, whereas the PSU Bank index is still trading ~12 % 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 recent swing low coincided with 50 -day EMA .

* Structurally, the Bank Nifty is witnessed 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 May month 7 % upmove followed by decline of 3 % which maintained the same rhythm of shallow declines indicating inherent strength .

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