Monthly Technical Outlook & Picks - July 2025- Axis Securities
Technical View
Sensex
Trend – For a fourth consecutive month, the benchmark index has extended its up move, registering a 2.7% gain. With the current month's price action, the benchmark index holds its four-year “up-sloping channel’s” support zone, indicating a positive bias. The index continues to move higher on a broader timeframe, forming a consistent series of higher tops and bottoms. This suggests that any upcoming minor corrections toward the identified support zone provide investors with an opportunity for accumulation.
Pattern - The monthly price action has formed a bullish candle and has closed above the previous month’s high, indicating positive bias. The index is sustaining itself above its 20, 50, 100, and 200-day Simple Moving Averages (SMAs), which reconfirms bullish sentiments.
Momentum - The weekly and monthly RSI are in the positive territory, signalling rising strength.
Direction - The index is expected to trade with a positive bias between the 85,500-80,500 levels.
Volatility - The weekly ATR has reached 1,866 points, which means the Sensex currently has a range of 1,866 points for a given week. However, in the daily timeframe, it has been highly volatile throughout the month, with several ups and downs, indicating that volatility may continue to expand in the coming days. INDIAVIX (12.78) has decreased by 21%, indicating decreased volatility.
Market breadth - The Sensex closed at 83,606 in the previous month, gaining 2.7%. Meanwhile, the BSE Midcap and BSE Smallcap indices gained 3.8% and 4.4%, respectively, indicating that the BSE Smallcap outperformed the BSE Sensex and Midcap indices. Notably, 299 stocks in the BSE 500 index are above their 200-day SMA, suggesting that the broader trend remains bullish. Additionally, market breadth has improved compared to last month, when 235 stocks were above their 200-day SMA.
Our Take - The Sensex is in an uptrend, characterised by a series of higher tops and bottoms, reflecting a strong uptrend. The benchmark index is facing stiff resistance from its prior supply zone (84,000-84,100), which remains a critical hurdle, indicating a cautious approach. However, the outlook remains bullish on a broader timeframe, with potential for sector rotation within the ongoing bull market. Investors are encouraged to adopt a buy-on-dips strategy, as short-term corrections offer attractive entry opportunities. The short to medium-term trend appears neutral to positive from current levels, with expected upside towards 84,600-85,500 levels. Any violation of the 82,800 support zone may cause profit booking towards the 82,000- 80,800 levels.
Technical View
Nifty 50
Trend - The index has gained around 3% to close at 25,417 levels. The primary trend remains bullish, with the index maintaining a higher top and bottom pattern in the broader timeframe. Any minor corrections toward the support zone are considered accumulation opportunities, reinforcing a positive long-term outlook and potentially paving the way for continued upward movement.
Pattern - The monthly price action has formed a bullish candle and closed above the previous month’s high, indicating short covering at lower levels. The index is sustaining above its 20, 50, 100 and 200-day SMAs, which reconfirms bullish sentiments in the near term. Momentum - The weekly RSI is in positive terrain, which signals rising strength on the short-term charts.
Direction - The index is expected to trade with a positive bias, fluctuating between the 26,100 and 24,500 levels.
Volatility - The weekly ATR stands at 575 points, suggesting that the Nifty currently has a weekly range of 575 points. On the daily timeframe, volatility has been pronounced, with notable fluctuations throughout the month. This suggests potential volatility expansion in the upcoming days. INDIAVIX (12.78) has decreased by 21%, indicating decreased volatility.
Market Breadth - In the previous month, the Nifty gained 3%, while the NSE Midcap and NSE Smallcap indices increased by 4% and 7%, respectively. This indicates that the NSE Smallcap outperformed the Nifty and the NSE Midcap. Notably, 304 stocks in the NSE 500 index are trading above their 200-day SMA, up from 248 last month, indicating an increase in market breadth and a short-term bearish bias.
Our Take – The Nifty is in an uptrend, characterised by a series of higher tops and bottoms, reflecting a strong uptrend. The benchmark index is facing stiff resistance from its prior supply zone (25,600-25,700), which remains a critical hurdle, indicating a cautious approach. However, the outlook remains bullish on a broader timeframe, with potential for sector rotation within the ongoing bull market. Investors are encouraged to adopt a buy-on-dips strategy, as short-term corrections offer attractive entry opportunities.
The short to medium-term trend appears neutral to positive from current levels, with expected upside towards 26,000-26,300 levels. Any violation of the 25,200 support zone may cause profit booking towards the 25,000- 24,500 levels.
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