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Nifty :25091

Technical Outlook

Day that was…

* Equity benchmarks pause the two-day losing streak amid mix global cues. Nifty gained 0.49% to settle the day at 25091. However, Midcap showed resilience, outperforming by gaining 0.62% for the day. Sectorally, PSU Bank, FMCG and IT underperformed while, Financial services, Nifty Private Bank and Metals outperformed.

Technical Outlook:

* The index opened the week on a subdued note, where supportive effort in the vicinity of 50-day EMA helped index to recover intraday losses. This led to the formation of a hammer like candle, signaling pause in downward momentum.

* Key point to highlight is that index witnessed support at the ninemonth horizontal line where as per the change of polarity concept previous resistance has now turned as support. In addition to that positive hidden divergence indicating buying demand emerged at lower level. With current 2.9% correction, Nifty rebounded from lower band of rising channel indicating bull market template is intact. Immediate support is in the vicinity of 24800-24500 zone and immediate resistance is at 25300 levels a decisive close above it would open the gates towards 25800 that would continue to act as resistance. Going forward focus should be on the US bilateral trade agreement and Q1 earning that would trigger momentum in the market.

* Structurally, since April intermediate corrections have been limited to 3% while sustaining above its 50 days EMA. In addition to that, over past 15-days index has retraced 61.80% of preceding 11-days 5% up move. Slower pace of retracement indicating robust price structure that bodes well for next leg of up move. Hence, focus should be on accumulating quality stocks on dip backed by strong earnings. Key Monitorable which will dictate the further course of action: a) All eyes will be on outcome of US-India bilateral trade deal. b) Falling US Dollar index would result into FII's inflow. c) India VIX has extended losses and sustaining below one year low of 12, indicating participants anxiety at lowest level.

* Structurally, the formation of higher peak and trough while absorbing host of negative news around geo-political issues coupled with absence of US – India trade tariff decision. Further, strong market breadth depict strength as currently 66% stocks of Nifty 500 universe are trading above 200-days SMA compared to last weeks reading of 60% while last month reading was 52%. This signals that the market is building strength for the next leg higher.

* We revise our support base at 24800-24500 zone for the Nifty which is based on 50% retracement of recent rally (23936-25669) and 20- week EMA

Nifty Bank : 56953

Technical Outlook

Day that was :

* The Bank Nifty break its two -day losing streak post steady Q 1 results from heavyweights . The index gained by 1 .19 % , settling the day at 56 ,953 . The Nifty Pvt Bank index outperformed the benchmark closed on a positive note, and ended at 27 ,881 , up 1 .26 % .

Technical Outlook :

* The Bank Nifty started the week on a strong note where it managed to hold previous session low and reclaimed the 20 -day EMA leading to close well above it, adds conviction to the bullish bias . This resulted in the formation of a sizeable bull candle reflects strong buying momentum, suggesting a potential shift in market sentiment and likelihood of continued upward movement .

* Key point to highlight is that Index witnessed buying demand in the vicinity of three -month horizontal line where as per the rule of polarity, previous resistance turned to support and hidden positive divergence, indicating pause in downward move . Since April, intermediate corrections have remained shallow limited to just 3 % , while the index has consistently held above its 50 -day EMA . Moreover, over the past three weeks, the index has retraced 50 % of the preceding 4 .50 % up move seen in the prior three weeks . The slower pace of retracement highlights a robust price structure, which augurs well for the next leg of the uptrend . We expect index to find supportive efforts in the vicinity of 55500 -54500 zone and gradually stage a rebound wherein 57500 would act as resistance once closed above it that will open the gates towards 58800 levels in coming quarter which is the implied target of the consolidation from (56098 - 53483 ) . Consequently, any dip from current levels could offer fresh buying opportunities .

* Underperforming the benchmark, PSU bank closed on a negative note, however supportive efforts in the vicinity of 20 day -EMA help index to close above it indicating buying demand at lower levels . After breaking out from an eleven -month falling trendline on 19th May, the index has maintained a higher -high -low structure on the weekly chart, signaling an intact uptrend . While Bank Nifty trades below ~ 2 . 5 % from its all -time highs, the PSU Bank index remains about ~12 % below its all -time high, presenting a compelling case for a catch -up move . Immediate support on the downside is placed at 6 ,700 , which is the recent swing low and coincides with the 20 -week EMA .

* Structurally, Bank Nifty is undergoing phase -wise expansion, with each rally establishing new price zones of acceptance . Instead of sharp directional moves, the index is progressing through brief consolidations that serve as launchpads for subsequent advances . This transition from volatility -driven swings to range -bound bases suggests increasing market maturity, with demand emerging at higher levels . The narrowing amplitude of corrections indicates that stronger hands are absorbing supply, maintaining trend continuity .

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