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Nifty :25638

Technical Outlook

Week that was…

* Indian equity benchmarks reclaimed 25500 mark after eight months, as easing of geopolitical worries bolstered market sentiment globally. Consequently, S&P 500 has approached near its All-Time High levels. Nifty performed in tandem with global peers gaining 2% for the week, at 25638. Sectorally, barring Realty and IT all sectors closed in green for the week, while, Metal, Energy and Nifty Financial Services outperformed.

Technical Outlook:

* Nifty started the week on a negative note, however, supportive efforts in the vicinity of 20-day EMA helped nifty to gain while maintaining its higher-high-low structure and closed the week on a strong note. This resulted into the formation of sizeable Bull candle, indicating acceleration of upward momentum.

* Key point to highlight is that, Index broke out from six weeks consolidation (25200-24500) supported by across sector participation makes us confident to believe that index is poised to challenge it's All time high in coming quarter. Meanwhile, from short term perspective immediate hurdle is placed at 25800. Volatility along the way if any should be used as a buying opportunity as we expect Nifty to hold key support of 24700. 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%.

* Structurally, despite geopolitical worries index maintained its higher high-low formation wherein Nifty has merely corrected 3% and now witnessing acceleration of upward momentum. Past four decades history suggest that knee-jerk reactions during geopolitical escalation offers good investment opportunity for medium term perspective rewarding with double digit returns in subsequent three months. We expect, index to maintain the same rhythm.

* On the broader market front, the Nifty midcap and small cap indices have resumed uptrend after two weeks breather and now just 3-4% 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 80% stocks of Nifty 500 universe are trading above their 50 days SMA while 62% of stocks are sustaining above their 200 days SMA, highlighting inherent strength.

* Our positive bias is further validated by following observations:

* 1. Outperformance of Bank Nifty continued as it inched upward and clocked fresh All Time High.

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

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

* 4. Bilateral Trade Agreement between India and US.

* We revise 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 : 57444

Technical Outlook

Week that was :

* The Bank Nifty extended the gains for the second straight week and closed at all -time high, amid positive global cues . The index settled the week at 57 ,444 , up 2 .13 % . The Nifty Pvt Bank index moved in tandem with benchmark, closed the week on a positive note at 28506 .10 , up 1 .88 % .

Technical Outlook :

* Bank Nifty started the week on a negative note, however, buying demand in the vicinity of 20 -day EMA helped index to gain while maintaining its higher -high -low structure and closed the week on a strong note . This resulted into the formation of sizeable Bull candle, indicating acceleration of upward momentum .

* Key point to highlight is that, Index broke out from three weeks consolidation (57000 -55000 ) supported by private banks indicating upward momentum to continue . Despite geopolitical issues Index majorly sustained above 20 -day EMA since April indicating upward momentum to continue . Oil prices fell sharply and closed the week down 12 % its worst week since March -23 and closed below $68 mark indicating positive momentum to continue in equities . Bank Nifty maintained the higher -high -low structure with positive market breadth which open the gates towards 58800 levels in coming quarter which is the implied target of the consolidation from (56098 -53483 ) . We revise our support base at 55500 , which is 80 % retracement of (55149 - 57263 ) . indicating uptrend is intact . Any, decline from current levels would offer incremental buying opportunities .

* Structurally, the Bank Nifty is witnessed 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 .

* Outperforming the benchmark the PSU Bank index closed on a strong note while making higher -low structure indicating supportive efforts at lower level . 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 ~15 % 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 the 38 .20 % retracement of the rally from 7th April 2025 to 9th June 2025 coincided with 50 -day EMA .

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