The index began the week on a subdued note but demonstrated resilience by rebounding sharply from its gap area near the 25,900 zone - ICICI Direct
Nifty :26027
Technical Outlook
Day that was…
Indian equity benchmarks paused after two strong up sessions and ended the day on a flat note at 26,027. Market breadth was neutral. Broader market relatively outperformed the benchmark with Smallcap index gaining 0.20%. Sectorally FMCG, Consumer Durables, and PSU Banks emerging as top performers, while Auto and Pharma stocks lagged.
Technical Outlook:
* The index began the week on a subdued note but demonstrated resilience by rebounding sharply from its gap area near the 25,900 zone. As a result, the daily chart printed a small bullish candle with a lower shadow, signalling the presence of buying interest from a higher support base.
* Technically, the index is forming a higher base around the 38.2% retracement of the recent two-session move (25,693–26,057), reflecting a constructive consolidation. Going ahead, sustained follow-through above this range could help the index resolve higher and gradually challenge its all-time high near 26,300 in the coming weeks.
* A decisive close above 26,300 is likely to boost momentum and open the path towards 26,800. In this backdrop, a buy-on-dips strategy remains advisable, with key support placed around 25,700, offering a favourable risk-reward for accumulating quality stocks
Key Monitorable for the next week:
* Bank Nifty: Index has been maintaining its dominating state by sustaining well above its 20 days EMA since October, highlighting sheer resilience
* Bank Nifty along with revival in IT and Oil & Gas would drive index higher as it carries >55% weightage in Nifty
* Broader Market: With previous week’s sharp recovery index has formed a hammer like candle in the vicinity of lower band of falling channel. In addition to that, the market breadth has seen improvement as % of stocks above 200 day-SMA have gained to 50% from last week’s reading of 46%, indicating impending pullback going ahead
* Commodity Update: MCX Silver prices continues to outperform and breached ?200,000 per kg mark first-time ever. The US Dollar index has retreated from 100 levels and now trading around 98 levels. Decline in dollar index has fueled rally in Copper (Trading at All Time High on MCX) while Aluminum is resolving out of 3 years base
Intraday Rational:
* Trend- Supportive efforts in the vicinity of 20-day EMA.
* Levels: Buy on declines near 61.8% retracement of last 2 days upmove ( 25693-26057)
Nifty Bank : 59390
Technical Outlook
Day that was:
Bank Nifty ended marginally positive at 59480, up 0.2%. The Nifty PSU Bank Index relatively outperformed gaining 0.4% closing at ended the week at 8281 levels.
Technical Outlook:
* Despite negative opening, Banknifty found supportive efforts emerged from 61.8% retracement of last two days up move(58800- 59545). The daily price action formed a Bullish candle around 20 days-EMA indicating elevated buying demand at short-term moving average.
* Over past four weeks Index has been oscillating in a broad range(58800-60100), highlighting healthy retracement of last up move. The breakout from past 5 days 750 points range (59713- 58800) would help Index to challenge 60100 in coming weeks.
* Momentum oscillators continue to reflect a bullish bias, while short and medium-term moving averages remain in a steady upward slope, validating the ongoing trend. Any temporary pullback should be treated as a buying opportunity in high-quality banking names, particularly those that delivered solid Q2 earnings, as immediate support is placed near 58,600, corresponding with the 50% retracement of the current advance (57,157–60,114).
* Historically, in the past two decades, there have been 17 instances where Bank Nifty delivered double-digit gains within four months after a decisive breakout above its previous two-month high. The current structure has once again confirmed such a breakout surpassing both the prior two-month high and the previous all-time peak (57,628), indicating a high-probability continuation setup for sustained upside momentum in the months ahead
* The PSU Bank Index has formed bull candle engulfing previous day price action indicating buying demand around 8200 levels. The daily price action formed is bull candle with higher high higher low also stochastic indicators is tilted upward indicating positive momentum. Nevertheless, pullbacks should be viewed as accumulation opportunities, with strong support around 8,100, being 50-day EMA
Intraday Rational:
* Trend- Buying demand around 20-day EMA highlighting strength
* Levels- Buy on declines near 61.8% retracement of last 2 days up move (59085-59800)
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