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Nifty : 24636

Technical Outlook

Day that was ..

Indian equity benchmark concluded the session on a flat note for third consecutive session as investor tracked ongoing negotiation between Iran and Oman over reopening of Strait of Hormuz. The index settle the day flat at 24636.However Nifty Smallcap index extended its gains for fifth consecutive day and settled a fresh life-high gaining 0.45%. Sector-wise PSU banks, NBFCs Oil&Gas were the top gainers while Realty and Auto took the breather

Technical Outlook :

• Nifty started the day on a flat note and thereafter traded within a narrow ~70 point to eventually closed inside previous session range. As a result, the daily price action has resulted into inside bar, indicating range bound session.

• Key highlight is that, over the past three session index has retraced merely 23.6% of its preceding six session ~1100-point rally, indicating healthy consolidation. This is further supported by a formerly trendline breakout zone which is now acting as support as per change of polarity concept.

• Structurally, index is trading well above its breakout area of 24600 coupled with confluence of key moving average, signifies positive structure remains intact. Hence, post a healthy consolidation we expect index to eventually resume its upward momentum and head towards 25500 in coming weeks

• Thereby, any decline from current level should be utilize as buying opportunity with strong Q1 earning as strong support is placed around 24000 being 61.8% retracement of current up move along with past 4 months rising trend line

Our constructive stance is based on following observations :

I. Nifty reclaimed its 200 days EMA (24370) after 5 months.

II. After 7 months, Nifty closed above its previous months high.

III. After an ~11% April surge, Nifty built a strong base above its threemonth trendline by absorbing a 1,500-point consolidation amidst geopolitical headwinds.

IV. Midcaps are regaining momentum near all-time highs as Q1 earnings optimism shifts away from large caps.

V. Lower Brent crude (-13%) and a weakening US Dollar Index are providing strong tailwinds for emerging markets.

VI. August is historically favorable, delivering positive returns 60% of the time with a 3% average gain.

VII. Sharp drops in July FII selling (~Rs 6,000 crore vs. the Rs 57,000 crore average) and global AI trade volatility are driving capital back into high-growth Indian markets.

Key Monitorable :

a) Falling Crude Oil

b) Sustenance of US Dollar index below $100 would provide cushion to Indian equities

Intraday Rational :

• Trend – Formation of higher high-low structure in daily time frame, indicating positive bias.

• Levels – Buy around Tuesday’s low.

Nifty Bank : 58064

Technical Outlook

Day that was :

Bank Nifty ended the sensex weekly expiry day on positive note up 0.5% at 58064 on back of mixed global cues.

Technical Outlook :

• Index started the day on flat note thereafter continued to move northwards forming higher peak higher trough where intraday declines where brought into. As a result, the daily price action has resulted into bull candle with higher high higher low, indicating positive bias.

• Index found supportive efforts from 20-day EMA around 57500 levels and now resumed uptrend after 2 days breather indicating positive momentum. Going ahead we expect, index to resolve out of one month consolidation range where upper band is placed at 58500 and open the door for next leg of up move towards 60000. The key support zone of 57000 is a placement of the 50-day EMA coinciding with 50% retracement of recent rally (56024- 58248) and four months rising trend line

• Another observation is that over last 5 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.

• The PSU Bank Index relatively outperformed for the day forming higher high higher, indicating support at short term moving average. Going ahead follow through strength above last week week(8423) high would set the stage towards 8700 levels

Intraday Rational :

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

• Levels: Sell around Thursday’s high.

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