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Nifty :25891

Technical Outlook

Day that was…

Equity benchmarks extended its upward momentum for the fifth straight session closing marginally higher at 25,890 up 0.12% amid volatile session. The last session highlighted a mixed sectoral trend with IT and BFSI indices leading the gains, while rest other sectors faced mild pressure, reflecting a sectoral rotation within the broader uptrend.

Technical Outlook

* Nifty started the session with a positive gap-up and scaled to the 26,000 mark, however the index failed to sustain momentum beyond this level triggering profit booking at elevated levels. As a result, daily price action formed a small bullish candle with a long upper shadow leading to a series of lower highs and lower lows price structure throughout the session indicating profit booking after the early intraday gains.

* Key point to highlight is that, Nifty has rallied >1500 points in last four weeks that hauled index in overbought territory, indicating possibility of temporary breather cannot be ruled out. However, such a breather should not be construed as negative, instead use dips to accumulate quality stocks with strong earnings as strong support is placed at 25400. Nifty reclaimed 26000 mark after twelve months of hiatus wherein in absorbed host of negative news around geopolitical issues, Tariff uncertainties, FII's sell-off, indicating revival in market sentiment amid trade deal development.

Our positive bias is further validated by following observations:

* The Breakout from 3 months consolidation helped Bank Nifty to clock a fresh All Time High, highlighting structural improvement. While optimism around earning boosted sentiment in IT, Oil & Gas stocks. Together, these indices carry 55% weightage of Nifty

* The current up move is backed by the improvement in market breadth as currently the ratio chart of stocks hitting new 52 weeks high vs new 52 weeks low (Nifty 500 Universe) continues to inch upward, highlighting strengthening of rally

* The breakout from past four months consolidation (25670-24350) backed by traction in index heavy weights, highlighting structural improvement that would eventually pave the way for next leg of rally.

* Nifty has been maintaining the rhythm of witnessing rally after approaching maturity of price and time wise correction. As Nifty has rallied 18% off April low, within which intermediate corrections arrested within 3-5% range. Meanwhile, timewise, over past three decades, there have been 12 instances wherein index has staged a strong rebound after consecutive 8 sessions negative close, garnering 7% rolling return in a month. In current scenario, index has rallied ~5%

Key Monitorable for the next week:

* Outcome of India-US tariff negotiations

* US Fed meet

* Progression of Q2FY26 earning season

* Continuation of buying spree from FII’s

* Gold: Gold has taken a breather after approaching overbought conditions after > 60% rally seen in this year. Going ahead, we expect gold to undergo healthy consolidation in $4400-$3900 range

Intraday Rational:

* Trend- Higher high-low formation confirms positive momentum

* Levels: After a Gap up opening utilize declines towards 50% retracement around 25900-25935 for Initiate long position

Nifty Bank : 58078

Technical Outlook

Day that was:

Bank Nifty continued it up move for the fifth-consecutive session and settled at 58,078 up 0.12%. The Nifty Private Bank index has relatively outperformed the benchmark, ending the day at 28,567 up 0.49%

Technical Outlook

* Bank Nifty started the session with a positive gap-up, however, the absence of follow-through buying during the initial half triggered profit booking in the latter part of the day. Consequently, the daily price action formed a small bullish candle with an upper shadow, indicating breather after printing a new all-time high, while maintaining the overall positive bias intact

* Key point to highlight is that the index has witnessed profit booking after a sharp 7% rally, however, index continues to maintain its higher-highlow structure for the fifth-consecutive session, indicating a healthy pause in the ongoing uptrend that will make index healthy. The stochastic oscillator on weekly chart has entered into overbought territory at 91, indicating temporary breather at higher levels cannot be ruled out. Hence, one should adopt a buy-on-dips strategy with immediate support placed near 56,800 representing the 38.2% retracement of the ongoing up move (54,226-58,261) and 20-day EMA.

* Structurally, over the past two decades, there have been 17 instances where Bank Nifty, following a decisive breakout above its previous twomonth high, has delivered double-digit returns within the subsequent four months while surpassing its prior all-time high. In the current scenario, with the index decisively breaking out above its previous two-month high, a similar structural rhythm appears to be unfolding, indicating a high probability of achieving double-digit returns and surpassing the all-time high of 57,600 in the coming months.

* PSU Bank Index has mirrored the benchmark and closed on a positive note. As the benchmark index recorded a new all-time high, the PSU Bank index remains merely 2.5% below its own record peak, indicating potential catch-up move in line with a relative strength emerging within the PSU banking space. Therefore, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 7,310, which aligns with the 50% retracement of the latest upswing (6,730– 7,906)

Intraday Rational:

* Trend- Higher high-low formation confirms positive momentum

* Levels: After a positive opening utilize declines towards 38.2% retracement for Initiate long position(57880-57940)

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