The Bank Nifty closed the day on a negative note, settling at 55,043 down 0.84% - ICICI Direct
Nifty : 24487
Technical Outlook
Day that was…
* The Indian equity benchmark closed on a negative note tracking muted global cues and settled the session at 24,487, down 0.40% ahead of inflation print. Midcap mirrored the benchmark however small cap relatively outperformed and closed flat to positive up 0.04%. Sectorally, Nifty private bank, Realty and Consumer Durable underperformed, while, Pharma, Auto and IT outperformed.
Technical Outlook:
* Nifty pared early gains and witnessed profit booking in the vicinity of previous weeks high where intraday gain short-lived while retracing 50% of the previous sessions move as a result daily price action formed a small bear candle with long upper wick indicating profit booking at higher levels.
* Key point to highlight is that, over past 14 sessions index failed to witness follow through strength after forming higher-high-low. Thereby as per Dow theory a decisive close above 24700 levels along with a follow through strength would open the doors towards the psychological mark of 25000 in coming weeks. On the weekly oscillator front the index remains in extreme over sold conditions, indicating the potential for a technical rebound cannot be ruled out. Failure to do so would result into extended correction wherein key support is placed around 24000-23800 levels. Going forward, Friday’s key event of Trump and Putin meeting would be key monitorable along with the tariff related development that would dictate the further course of action.
* On the structural front, market breadth has bounced from the bullish support zone of 25 where the % of stocks above 50 days EMA currently is at 29 that offers incremental buying opportunity. We believe, the earning-based volatility is likely to subside as we enter the fag end of the earning season while focus will now completely shift to tariff development.
* In the technical parlance, 52 weeks EMA (Equivalent to 200 days) has the utmost importance where long term accumulation take place. The index is approaching key support zone of 24000-23800 being 52 weeks EMA and 50% retracement of entire up move off April low 21743 amid oversold condition, indicating possibility of technical pullback cannot be ruled out. Hence, traders should refrain from creating aggressive short position in the truncated week. Instead focus should be on accumulating quality stocks backed by strong earnings in a staggered manner.
* On the sectoral front, focus should be on domestic themes thereby BFSI, Consumption, Capital Goods & infra would be in focus
Key monitorable to watch out for in current volatile scenario:
a) Development of Bilateral trade deal negotiations.
b) US and Domestic inflation print
c) U.S. Dollar index retreated from past two years breakdown area of 100, indicating corrective bias while crude oil pared last week's gains and resumed downward momentum
Nifty Bank : 55043
Technical Outlook
Week that was:
* The Bank Nifty closed the day on a negative note, settling at 55,043 down 0.84%. The Nifty Pvt Bank index mirrored the benchmark, ending at 26,560 with a decline of 0.81%.
Technical Outlook:
* The daily price action formed a bearish candle with a small upper wick, indicating a lack of follow-through buying demand above the prior day's high.
* Key point to highlight is that since last two-days Bank Nifty is trading within the Friday range (54900-55640) which coincides with 100-day EMA and a rising trendline support both placed around 54900 that has held firm since mid-April 2025. However, A strong close above the previous week's high at 55750 will negate the prevailing lower-high pattern, that would confirm pause in current downward move. A decisive breakout above this level would likely mark the start of the next leg of the uptrend. Over the past sixweeks of corrective phase ,the weekly stochastic oscillator has entered in to an extreme oversold zone, suggesting selling pressure might be subsiding and providing a potential catalyst for a bounce. Meanwhile breaching below the support of 54900 could lead to extended correction, potentially testing the gap support zone near 54400, that should provide cushion on the downside.
* Structurally Since April, intermediate corrections have remained shallow while the index has consistently held above its 100-day EMA. Moreover, over the past eleven weeks, the index has retraced 50% of the preceding up move from 51863 to 57614 (11%) in the previous six weeks, indicating a slower pace of retracement with a robust price structure, that augurs well for the next leg of the uptrend.
* PSU Bank Index relatively outperformed the benchmark and closed marginal lower, the index has formed a small bear candle, signaling a breather after strong rally from previous session. The Index maintains its higher-high-low pattern for the fourth straight session which coincides with key confluence point, the lower band of an ascending channel and the 100-day EMA, which has held firm since May 2025 despite recent tariff-related volatility, indicating inherent strength. While the Bank Nifty consolidates within 5% of its all-time high, PSU Banks continue to lag significantly, trading 16% below their peak. This presents a potential catch-up opportunity for the sector
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