The Bank Nifty extended the gains for the third consecutive day - ICICI Direct
Nifty : 25549
Technical Outlook
Day that was…
* Indian equity benchmarks extended the gains for the third consecutive day and closed highest since Oct-24 amid positive global cues. The Nifty settled at 25549 up 1.21%. Sectorally, Media, Realty and IT underperformed, while, Metal, Oil & Gas and Nifty PVT Bank outperformed.
Technical Outlook:
*Nifty started the day on a flat to positive note, and after the initial up move it maintained its higher-high-low throughout the session where intraday pullbacks were bought into. This resulted into the formation of sizeable Bull candle, indicating acceleration of upward momentum.
* Nifty to start on a positive note tracking firm global cues. Key point to highlight is that, Nifty broke above the upper band of the rising channel and closed above 25500 its highest close since 3rd Oct 2024 indicating robust price structure. Nifty maintained the higher-highlow structure with positive market breadth further indicate uptrend to continue from the current levels. Today’s rally was fueled by large caps specially Bank Nifty as it cloaked all-time high levels. . This makes us maintain our target to 25800 levels which could achieve in the month of July which is the implied target of the consolidation from (25200-24500). Meanwhile, we revise our support to 24700. Going ahead, we expect volatility to subside and sector rotation will be in play. Hence, we advise any dips should be used as a buying opportunity. Following observations are important to watch out for which would provide cushion to the market:
*a) Further weakness in US Dollar index as it broke $97 and US yields.
*b) Declining crude oil prices.
* c) Bilateral Trade Agreement between India and US.
* Structurally, the index is witnessing shallow retracement as over past five weeks it merely corrected 3% of preceding six week's rally (15%), indicating robust price structure that is helping index to set the stage for next leg of up move.
* On the broader market front, the Nifty Midcap and Small cap index closed on a positive note for the fifth consecutive day making higherhigh-low formation and both the Mid cap and small cap indices are trading 3% and 5% from its all-time high indicating robust price structure. The current rally is backed by improvement in the market breadth as currently % stocks of Nifty Midcap 100 and Small cap 100 universe are trading above 79% and 61% of 50/ 200 days SMA that augurs well for durability of ongoing up move.
* We revise our support to 24700 for the Nifty and is based on 80% retracement of recent rally (24473-25565) and 50-day EMA.
Nifty Bank : 57206
Technical Outlook
Day that was :
* The Bank Nifty extended the gains for the third consecutive day and closed at all -time high, amid positive global cues . The index settled at 57 ,206 , up 1 .03 % . The Nifty Pvt Bank index moved in tandem with benchmark, closed on a positive note at 28417 , up 1 .03 % .
Technical Outlook
* Bank Nifty opened on a flat to positive note and, after an initial up move, maintained a higher -high -low structure throughout the session where intraday pullbacks were bought into . This resulted into the formation of sizeable Bull candle, signaling a strong continuation of upward momentum .
* Key point to highlight is that, after thirteen session index broke out from the all -time high with a decisive close indicating robust price structure . Despite geopolitical issues Index majorly sustained above 20 -day EMA since April indicating upward momentum to continue . Oil prices fell sharply declined 15 % from Monday’s top of $80 and currently sustaining below $68 mark indicating positive momentum to continue . Bank Nifty maintained the higher -high -low structure with positive market breadth indicating uptrend is intact . All these factors opened the gate towards 58800 levels in the month of July 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 ) . Any, decline from current levels would offer incremental buying opportunities .
* Structurally, the Bank Nifty is 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 recent 7 % upmove and decline of 3 % as expected same rhythm continued .
* Underperformed the benchmark the PSU Bank index after an initial decline witnessed buying demand in the vicinity of 20 -day EMA and rebounded sharply with higher -high -low structure making hammer candle on daily 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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