Nifty settled the day at 23995 up 1% - ICICI Direct
Nifty : 23995
Technical Outlook
Day that was .. Equity benchmark started the week on a positive note tracking ease in geopolitical tension and sharp fall in crude oil prices. Nifty settled the day at 23995 up 1%. Market breadth turned positive with an (A/D) decline ratio of 2:1. Broader market moved in tandem with benchmark with both Nifty Mid and Smallcap gained 1%. Sectorally, all major indices closed in green while IT, Realty and Auto were the top outperformers.
Technical Outlook :
• Nifty opened with a positive gap-up on a flat note and witnessed follow through strength as intraday dips were bought into. The daily price action formed is bullish break-away candle at 50-day EMA , indicating positive bias.
• Key highlight is that a major gap-down in crude oil along with appreciation in rupee following ease in geopolitical tension has led a strong pullback in Nifty. Addition to that, Index has closed above its previous session high after four-consecutive session of decline, signifies end of corrective phase. Going ahead, we expect index to resume its recovery phase and eventually head towards 24500 being previous swing high. On the downside, strong support is placed at 23600 confined with its previous week low and 61.8% retracement of JuneJuly 2026 upmove (23070-24530) .
• On a broader market perspective, Both Mid and Small-cap index staged a rebound from its previous multi-year trendline breakout area which is now acting as a support as per change of polarity principle. Hence focus should be on accumulating quality Mid and Smallcap stock supported by strong Q1 results.
• Structurally, the Nifty has been consolidating within a 1,500-point over the past quarter. Defending the pivotal 23,600 mark is crucial to establish a higher base, which would set the groundwork for the next leg of the secular uptrend.
• USD-INR has formed double top formation pattern in a weekly timeframe along with negative RSI divergence in place. Hence, further appreciation in Rupee would act as positive catalyst for Indian equity markets
Key Monitorable :
a) Historical data of Brent crude oil suggest that bounce after a sharp decline in amid geopolitical conflict (Iraq war, Russia Ukraine 2022) typically cap around 40%. In the current scenar1990-91io, Crude has rallied over 44% from recent low of $70 and retreated from the $100 mark.
b) Empirically, after such a pattern crude undergoes consolidation and eventually revisits the panic low in subsequent quarters. Therefore, we believe falling crude oil would be the primary catalyst to reignite momentum in equities.
c) US Federal Policy
d) Monthly Expiry
Intraday Rational :
• Trend – Index has closed above its previous session high after fourconsecutive session of decline, signifies end of corrective phase
• Levels – Buy around 50% retracement of last 2 days range.
Nifty Bank : 57087
Technical Outlook
Day that was : Bank Nifty snapped 4 days decline and ended the day on positive note up 0.69% on back of positive global cues and closed at 57087 levels.
Technical Outlook :
• After positive opening index remained above break away gap-area (56928-56831) and closed positive. Consequently, the daily price action resulted into high wave like candle with higher high higher low, indicating positive bias.
• Going ahead follow-through strength above Monday’s high (57330) coinciding with 20-day EMA would lead pullback towards 58500 levels being July highs.
• We expect, index to hold the key support zone of 56000- 55500 and gradually head towards upper band of consolidation placed at 58500 in coming month. The key support zone of 56000-55500 is a placement of the 38.2% retracement of entire rally (49954-58706) and gap-area is placed around 55,500 levels.
• Another observation is that over last 3 weeks Index has retraced by 38.2% of earlier 3 weeks rally, indicating slower pace of retracement which would help to set stage for next leg of rally.
• PSU Bank Index is consolidating above 200-day EMA. Going ahead follow through strength above last weeks high would set the stage towards 9100 levels
Intraday Rational :
• Trend - Supportive efforts emerged from the lower band of the contracting triangle
• Levels – Buy around 50% retracement of last 2 days range
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