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Nifty : 25405

Technical Outlook

Day that was…

* Indian equity benchmarks ended second session on a negative note and closed at 25405 down 0.19%. Broader markets relatively outperformed the benchmark. Midcap and Small cap indices closed on a flat to positive note. Sectorally, PSU Bank Metal and Realty underperformed, while, Consumer Durables ,Healthcare and Auto outperformed.

Technical Outlook:

* The lack of follow through strength above previous session’s high resulted into profit booking which dragged the index towards Wednesday’s low. This resulted into the formation of bear candle with upper wick with close within previous session range, indicating extended breather after recent upmove.

* Following six weeks consolidation breakout, the index is undergoing healthy price retracement of past two weeks rally ahead of US-India Bilateral Trade agreement. Such a move would allow the index to cool off from its overbought conditions, offering a constructive pause within the ongoing uptrend. The index continues to hold above its 20- day EMA since April 2025, indicating sustained strength and strong underlying momentum. This persistent support indicates that the broader trend remains firmly upward. We expect index to gradually resolve higher and head towards the 25800 zone in the near term, that would eventually set the stage for a potential march towards alltime highs in the coming month. Additionally, the Q1 results season kicks off next week, which will provide fresh earnings visibility and further directional cues for the index.

* From seasonality perspective, July has been the favourable month for Nifty since 1991, 71% of the time returns have been positive with an average of 2.5%. Volatility along the way should be used as a buying opportunity as we expect Nifty to hold key support of 24900.

* On the broader market front, the Nifty midcap and small cap indices have witnessed flat to positive close in Thursday's session and now just 2-3% away from their life time highs. Meanwhile, northward inching ratio of Nifty 500 / Nifty 100 makes us believe that broader market would continue with its outperformance. Further, current rally is backed by the sturdy market breadth as currently 77% stocks of Nifty 500 universe are trading above their 50 days SMA while 60% of stocks are sustaining above their 200 days SMA, highlighting inherent strength.

* Our positive bias is further validated by following observations:

* 1. Easing of geopolitical tension has resulted into decline in crude oil prices.

* 2. US Dollar index is sustaining below past two months low of $98 which augurs well for FII’s inflow in emerging markets.

* 3. Bilateral Trade Agreement between India and US.

* We maintain our support to 24900 for the Nifty and is based on 61.8% retracement of recent rally (24473-25654) and 20-day EMA.

Nifty Bank : 56792

Technical Outlook

Day that was..

* The Bank Nifty traded on a negative note for the second straight session and settled at 56792 , down 0 .36 % . The Nifty Pvt Bank index, mirroring the benchmark, and closed on a negative note at 27977 .45 , down 0 .46 % .

Technical Outlook : 

* The Bank Nifty began Thursday’s session on a flat note and attempted an early upmove . However, profit booking emerged near the 38 .20 % retracement level of the previous sessions range, leading to a lower -high -low formation . Intraday bounces remained short -lived, culminating in the formation of a bearish candle with an upper shadow, indicating extended breather after the recent rally .

* Key point to highlight is that, Thursday’s session had broken and closed below past sessions low indicating slow down in upward momentum . The index continues to trade above the 20 -day EMA, a level it has respected since April . This, combined with a positive market breadth, affirms the higher -high -low price structure, indicative of a well -established uptrend . Any decisive close above the previous sessions high could signal resumption of the uptrend, with an upside projection towards 58800 in coming quarter which is the implied target of the consolidation from (56098 -53483 ) . We maintain our support base at 55500 , which is 80 % retracement of (55149 -57263 ) . Hence any, decline from current levels would offer incremental buying opportunities .

* PSU Bank index took breather for the second session in a row while maintaining higher -high -low structure indicating extended breather . The index broke out from an eleven -month falling trendline on 19th May and, since then, has been forming a higher - high -low structure on weekly which is intact, indicating uptrend is intact . While the Bank Nifty is trading at all -time high, whereas the PSU Bank index is still trading ~12 % below its all -time high, presenting a compelling case for a catch -up move . Meanwhile, immediate support on the downside is placed at 6 ,700 , which is recent swing low coincided with 50 -day EMA .

* Structurally , the Bank Nifty has been witnessing an elongation of rallies followed by shallow retracements, signifying a robust price structure . The April months up -move of 14 % is stronger compared to the March month’s 9 % rise . Additionally, the declines are becoming shallower, with the April months decline being 4 . 6 % versus 5 . 4 % in March 2025 after May month 7 % upmove followed by decline of 3 % which maintained the same rhythm of shallow declines indicating inherent strength .

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