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Nifty : 23989

Technical Outlook

Day that was .. Equity benchmark extended its winning streak for third consecutive session tracking US- Iran peace deal framework, decline in crude oil prices and appreciation in rupee. Nifty settled the day at 23980, up ~130 points. Market breadth was in favor of advance with an A/D ratio 1.3:1. Broader market moved in tandem with the benchmark. Sectorally, Realty, IT and Consumer durable outperformed while Metals, Auto and Pharma were the laggards.

Technical Outlook :

• Nifty started the day on a positive note and oscillated within ~110 points range. As a result, daily price action resulted into an inside bar confined within previous session’s trading range, indicating temporary breather post three days strong up move.

• Index has taken a breather after witnessing ~950 points rally in last three sessions. Key point to highlight is that, the breakout from four months falling trend line confirms resumption of uptrend that makes us revise target upward at 24500 for the coming weeks.

• Structurally, off Apr-26 peak, the index underwent a slower pace of retracement wherein it retraced 61.8% of April rally (11%). During this corrective phase, Nifty seen three internal corrections ranging from 800-1200 points. However, notable point is that, the current pullback is the strongest (940 points) compared to last two pullback (670, 830 points).

• The elongation of rallies signifies revival in upward momentum that makes us believe, the index has absorbed host of negativity around geopolitical conflict and formed a stage for next leg of up move. Hence any decline should be used as incremental buying opportunity as strong support is placed at 23400. Our Constructive bias is based on following observation :

• The current positive development on geopolitical de-escalation front would result into further decline in Crude oil prices. This would be the key catalyst for Nifty for next leg of up move

• Bank Nifty has done the heavy lifting, as RBI amendments fueled the momentum, resulting into breakout from two month falling trend line which would drive Bank Nifty towards 57800 in coming weeks

• Nifty midcap has taken a breather after clocking fresh high. Post earning revival is expected to trigger healthy catch up in small cap index which is still 9% away from All Time high Key Monitorable : a) US Fed Policy b) IIP Data c) Crude Oil: Brent crude is trading at two months low below $80 mark. Confirmation of geopolitical de-escalation will result into further cool-off in oil prices, boosting Indian equities market Intraday Rational :

• Trend – Breakout from 4-months falling trendline, indicating conclusion of corrective phase

• Levels – Buy around 61.8% retracement

Nifty Bank : 57297

Technical Outlook

Day that was : Bank Nifty Index ended the day on flat to positive note up 0.2% at 57297 on back of mixed global cues. Nifty PSU Bank closed marginally negative at 0.2%.

Technical Outlook :

• BankNifty opened on positive note and remained range bound throughout the sessions within previous days range. The daily price action resulted into doji like candle, indicating breather.

• Over past two weeks index has rallied 9% that hauled daily stochastic in overbought conditions. Therefore, couple of days breather cannot be ruled out at higher levels. This would make market healthy and eventually set the stage for next leg of rally and form higher base to gradually head towards target of 59300 levels in coming month as it is 80% retracement of Feb26-April26 decline

• Structurally, index has broken out of four months falling trend line, indicating conclusion of corrective bias that opens the door for next leg of up move. The formation of higher high-low on the weekly chart makes us revise support upward towards 55000 levels being 61.8% retracement of current up move coinciding with 50-day EMA.

• Mirroring the benchmark, PSU Bank Index logged a resolute breakout from four months falling trend line, signifying resumption of uptrend. Structurally Index has formed higher base above 52-week EMA over past four weeks. Going ahead we expect Index to regain momentum and head towards 8800 levels being 80% retracement of current decline(9095-7800)

Intraday Rational :

• Trend - Breakout from 4 months falling trend line, confirms resumption of uptrend

• Levels - Buy around 80% retracement

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