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Nifty :25517

Technical Outlook

Day that was…

* Indian equity benchmarks snaps four-day winning streak and closed at 25517 down 0.47%. Market breadth was in favor of advances, with an A/D ratio of 1.50:1 where broader markets outperformed the benchmark. Midcap and Small cap indices closed on a positive note up 0.60% and 0.52% respectively. Sectorally, Nifty PVT Bank, Realty and Auto underperformed, while, PSU Bank, Consumer Durables and Pharma outperformed.

Technical Outlook:

* Nifty started the week on a flat note, however, profit booking in the vicinity of Friday’s high with Lower-high-low structure where intraday pullbacks were sold into. This resulted into the formation of Bearish engulfing candle, indicating profit booking at higher levels after a recent upmove.

* Key point to highlight is that, Index is still sustaining above the break out levels of last week and took breather in Monday’s session indicating pause after a recent upmove. Index is trading above its key moving averages indicating a strong uptrend. Volatility along the way should be used as a buying opportunity as we expect Nifty to hold key support of 24900. Going ahead, after couple of days breather, we expect Nifty to resolve higher and head towards 25800 and gradually towards All time 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%.

* 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 81% stocks of Nifty 500 universe are trading above their 50 days SMA while 61% 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 : 57313

Technical Outlook

Day that was

* The Bank Nifty halts the four session upward momentum after Friday’s all - time high close . The index settled at 57 ,313 , down 0 .23 % . The Nifty Pvt Bank index underperformed the benchmark, closed on a negative note at 28254 .60 , down 0 .88 % .

Technical Outlook

* Bank Nifty started the week on a negative note, however, index witnessed mild profit booking near the upper band of the contracting triangle, forming a lower -high -low structure . Intraday pullbacks faced some resistance,, resulting in a small bearish candle, suggesting consolidation at higher levels after a recent upmove .

• Key point to highlight is that, Index is still maintaining above the break out levels of last week and took breather in Monday’s session indicating pause after a recent upmove . Index is trading above its key moving averages indicating a strong uptrend . Oil prices fell sharply and closed the week down 12 % its worst week since March -23 and currently trading below $67 mark indicating positive momentum to continue in equities . Bank Nifty maintained the higher -high -low structure with positive market breadth which 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 .

* 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 .

* Outperforming the benchmark the PSU Bank index 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 the 38 .20 % retracement of the rally from 7th April 2025 to 9th June 2025 coincided with 50 -day EMA .

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