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Nifty :25044

Technical Outlook

Day that was…

Indian equity benchmarks closed on a positive note amid ceasefire between Isarel and Iran. The Nifty settled at 25044 up 0.29%. Market breadth was in favor of advances, with an A/D ratio of 2:1 where broader markets outperformed the benchmark. Midcap and Small cap indices closed on a positive note 0.71% and 0.72% respectively. Sectorally, barring Oil & Gas and Media, all sectors closed in green, where, PSU Bank, Metal and PVT Bank outperformed.

Technical Outlook:

* Nifty started the day with a gap up opening, after the initial up move index witnessed profit booking in the vicinity of 80% retracement of the decline from (26277-21743) and almost filled the initial gap. This resulted into the formation of bear candle with upper wick and positive close, signaling breather.

* Nifty likely to witness gap up opening amid firm global cues tracking Fed’s dovish statement. Key point to highlight is that, amid Israel-Iran ceasefire crude oil declined 13% from Monday’s top of $80 and currently sustaining below $70 levels which is sentimentally positive. Technically, Nifty has been maintaining higher-high-low structure with positive market breadth indicating uptrend is intact. All these factors indicate that index will gradually close above 25200 levels and eventually open the gate towards 25800 levels in the month of July which is the implied target of the consolidation from (25200-24500). Meanwhile, 24500 will act as strong support. Going ahead, we expect volatility to remain tracking geopolitical development coupled with monthly expiry session and tariff related development. Hence, we advise any dips should be used as a buying opportunity.

* Over past five weeks, Nifty has been consolidating in 700 points range wherein it managed to defend the 24500 on multiple occasions despite escalated geopolitical issues. Further, index heavy weights regained upward momentum as RBI eased project financing norms that boosted market sentiment.

* Structurally, the index is witnessing shallow retracement as over past five weeks it merely corrected 3% of preceding six week's rally (15%), indicating robust price structure that is helping index to set the stage for next leg of up move.

* On the broader market front, the Nifty midcap index has taken a breather after 28% rally off April low and now approaching lower band of rising channel that coincided with 50 days EMA. In addition, since April lows, 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. The current rally is backed by improvement in the market breadth as currently 54% stocks of Nifty 500 universe are trading above their long term 200 days SMA compared to a month back reading of 30% that augurs well for durability of ongoing up move.

* The key support threshold of 24500 for the Nifty is based on lower band of past five weeks consolidation coincided with 50% retracement of recent rally (23935-25222) and 50-day EMA

Nifty Bank : 56462

Technical Outlook 

* The Bank Nifty closed on a positive note, amid ceasefire between Israel and Iran . The index settled at 56 ,462 , up 0 .72 % . The Nifty Pvt Bank index mirrored the benchmark, closed on a positive note at 28135 , up 0 .73 % .

Technical Outlook

* The Bank Nifty started the day with a gap up opening, after the initial up move index witnessed profit booking in the vicinity of 80 % retracement of the decline from (57049 -55149 ) and filled the initial gap . This resulted into the formation of Doji candle with upper wick and lower wick with a positive close, signaling breather .

* After six sessions of consolidation Index finally broke out from the range and closed above it indicating upward momentum to continue . Oil prices fell sharply declined 13 % from Monday’s top of $80 and currently sustaining below $70 mark indicating positive momentum to continue . Despite profit booking at higher levels Bank Nifty maintained the higher -high -low structure with positive market breadth indicating uptrend is intact . All these factors indicate that index will close above 57049 levels and eventually open the gate towards 58800 levels in the month of July which is the implied target of the consolidation from (56098-53483). While, strong support is placed at 55000, which coincides with lower consolidation zone . Any, decline from current levels would offer incremental buying opportunities . Key point to highlight is that, over past six weeks Bank Nifty has managed to close above last week’s low . In current scenario, despite ongoing geopolitical worries it has maintained the same rhythm by closing above its last weeks low, indicating uptrend is intact .

* 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 and decline of 3 % we expect same rhythm to continue .

* Outperforming the benchmark the PSU Bank index after the initial upmove witnessed profit booking in the vicinity of previous swing high and 61 .80 % retracement of the decline (7249 -6709 ) indicating breather . 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 ~ 1 % below its all -time high, whereas 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 7th April 2025 to 9th June 2025 coincided with 50 -day EMA .

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