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Nifty :26013

Technical Outlook

Day that was…

Indian equities stretched their winning streak to six sessions, lifting the benchmark Nifty to 26,012 (+0.40%). Nifty Midcap stole the show again, notching a fresh all-time high at 61,180 (+0.75%). Market breadth held steady with an AD ratio of 1:1, while sectoral momentum stayed broadly positive, led by PSU Banks and Auto, which continued to outperform.

Technical Outlook:

* Nifty kicked off the week on a strong footing, with follow-through buying driving a bullish candle that printed a higher-high, higher-low pattern a clear sign of renewed momentum and bulls tightening their grip on the trend.

* Key point to note is that the index has reclaimed and closed above the psychological 26,000 mark after nearly 2-weeks. Bank Nifty which carries 36% weightage in Nifty has finally witnessed a decisive breakout, triggering a strong upward move and printing a fresh alltime high. Thereby with the above bullish structure we reiterate our bullish stance and expect index to gradually resolve higher to retest its all-time high near 26,300 in the coming month. Further, with betterthan-expected Q2 earnings reinforces positive momentum that would drive index higher. Hence, any decline should be used as buying opportunity as strong support is placed at 25600 as it is 61.8% retracement of Sept-Oct rally (24588-26104) coincided with 50 days EMA

Following observations makes us reiterate our positive stance:

* Political Boost: A decisive victory for the NDA in Bihar election has boosted the investors sentiment and augurs well for continuation of prevailing uptrend

* Bank Nifty: Past 10 sessions decline completely retraced back in just five sessions, Faster retracement signifies structural improvement

* Midcap: Midcap index challenged Sep-24 high and recorded fresh alltime high. The current up move is backed by improvement in market breadth as currently 75% of Midcap index stocks are trading above their 200 days SMA compared to one month back reading of 64

* Nifty IT vs Nasdaq: Defying the past two decades positive correlation with Nasdaq, the Nifty IT index has seen correction in recent past. Consequently, Nifty IT vs Nasdaq ratio has approached at two decades low. The current pullback in the ratio signifies mean reversion can be seen going ahead wherein Nifty IT would relatively outperform the Nasdaq in coming months

* Global Macros: US Dollar index and Brent crude have been inching downward that augurs well for emerging markets

Key Monitorable for the next week:

* With the Development of India-US tariff negotiations would be key monitorable

Intraday Rational:

* Trend- Higher-High and High Low formation

* Levels: Buy on declines near 80%of last two days upmove(25815- 26083)

Nifty Bank : 58963

Technical Outlook

Day that was:

The Bank Nifty extended its winning streak for seventh-consecutive session while clocking a fresh all-time high again to settle at 58,969, up 0.76%. The Nifty PSU Bank index continued to outperform the benchmark to close at 8,491 up 1.09%.

Technical Outlook:

* Bank Nifty opened the week with a constructive gap-up, with intraday pullbacks consistently being absorbed by strong buying interest. The index eventually settled near the day’s high, resulting in a decisive bullish candle on the daily chart, indicating the prevailing positive bias.

* The index continues to trade within a rising channel, consistently forming higher-highs-lows, which enabled it to convincingly surpass the previous all-time high (58,577). Notably, PSU banks remains in firm leadership, marking fresh record highs, while the private bank index is just 1.5% away of its peak, hinting at a potential catch-up move that could further bolster the ongoing uptrend. Thereby, we reiterate our positive stance and expect the index to gradually resolve higher towards our projected target of 60,000 in the coming month.

* On momentum front, with all key moving averages positioned in a northward slope, reflecting a firm bullish structure. Momentum readings further support this setup, as both daily and weekly RSI continue to hold in the bullish band, reinforcing confidence in the breakout. Hence, focus should be on accumulating quality stocks on dips backed by strong earnings as immediate support is placed near 57,500, being 80% retracement of the ongoing advance (57,157–58,962).

* Historically, there have been 17 instances over the past two decades where Bank Nifty, following a decisive breakout above its previous two-month high, delivered double-digit returns within the subsequent four months. In the current setup, the index has once again confirmed a breakout above its prior two-month high and surpassed the previous all-time peak, reaffirming the prevailing bullish structure. This setup indicates a high-probability continuation pattern for sustained upside momentum in the coming months.

* The PSU Bank Index continues to outperform, maintaining a higher-high, higher-low formation for the tenth-straight week on the back of strong Q2 earnings. In near term, index is witnessing series of healthy consolidation after sharp up move. However, any dip from hereon should not be construed as negative instead capitalized it as buying opportunity in quality stock as strong support is placed near 7,800, aligning with the 38.2% retracement of the latest rally (6,730–8,391).

* Intraday Rational:

* Trend- Higher-High and High Low formation

* Levels Buy on declines near 61.8% retracement of previous two days upmove(58380-59067)

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