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Nifty : 23985

Technical Outlook

Day that was ..Equity benchmark concluded the monthly expiry session on a flat note tracking easing tension in middle east, cool-off in crude oil prices and appreciating rupee. Nifty settled the day at 23985. Market breadth was in favor of decline with an (A/D) ratio of 1:2. Within broader market Nifty Smallcap relatively underperformed declined 0.2%. Sectorally, IT, Realty and Auto were the top gainers while FMCG and BFSI were the laggards.

Technical Outlook :

• Nifty opened on a flat note and traded in narrow range throughout the session. The daily price action formed is small bullish candle with long upper shadow, indicating breather after two-days of upmove.

• Today Nifty is likely to witness gap up opening tracking firm global cues. Key highlight is that Index took a breather after a ~400 points sharp upmove over the past two session. Going ahead any positive outcome from the US Fed policy in coming session would further improve the market sentiment and help index to resume its current upmove towards 24500 mark, being previous swing high. On the downside, strong support is placed at 23600 confined with its previous week low and 61.8% retracement of Jun-Jul26 upmove (23070-24530) .

• On a broader market perspective, Both Mid and Small-cap index is basing above 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 equities

Key Monitorable :

a) The AI/Semiconductor induced rally in North Asian markets (Kospi, Nikkei) is now showing sign of exhaustion, resulting into extended profit booking. Conversely, this rotation could benefit growth-oriented economies like India.

b) 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.

c) 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.

d) US Federal Policy

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 : 56756

Technical Outlook

Day that was : Bank Nifty ended lower on Nifty monthly expiry day down 0.58% at 56756 on back of mixed global cues.

Technical Outlook :

• After flat opening index breached previous session low and failed to utilize the pullback and remined in downtrend during second half and closed lower at 56756 levels. Consequently, the daily price action resulted into small bear candle with lower high lower low, indicating extended breather.

• 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 taking breather at 200-day EMA. Going ahead follow through strength above Mondays(8423) high would set the stage towards 8700 levels

Intraday Rational :

• Trend - Supportive efforts emerged from the lower band of the contracting triangle

• Levels – Buy around 50% retracement of last 3 days range

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