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Nifty :24716

Technical Outlook

Day that was…

• Indian equity benchmarks ended the session on a negative note, amid weak global cues. The Nifty settled at 24716, down 34 points. Market breadth was in favor of advances, with an A/D ratio of 1.10:1, as the broader market outperformed. c. Sectorally, Metal, IT and Consumer durable were the laggards, whereas, Realty, PSU Bank and FMCG were the out performers.

Technical Outlook:

• The index opened the week on a negative note after an initial decline supportive efforts in the vicinity of previous swing low where index staged a gradual recovery. This led to the formation of a hammer candle indicating buying demand at lower levels.

• Despite volatility index managed to defend 20-day EMA since mid April. Therefore, a follow through strength above Monday’s hammer candle would indicate pause in down move. Further, Bank Nifty is breaking out from contracting triangle where the weightage of financial stock is 35% in nifty that will pave the way above upper band of consolidation and head towards 25500 in the month of June. In the process all eyes will be on upcoming RBI’s Policy (to be released on coming Friday). Consequently, rate sensitives like financials, auto, realty would be in focus.

• Key thing to highlight is that, the index has staged a strong 15% rally from April lows. Post that, Nifty has been consolidating over past two weeks wherein it corrected 3%. The elongation of rallies followed by shallow retracement is a is key ingredient of a structural bull market. Hence, we believe ongoing consolidation would set the stage for next leg of up move towards 25500 wherein strong support is placed at 24200.

• On the broader market front, the ratio chart of Nifty 500 / Nifty 100 has staged a strong rebound after finding support from multi years range breakout area. The rising ratio line highlights relative outperformance of the broader market compared to large caps. Meanwhile sector rotation underpinned by improvement in market breadth augurs well for durability of ongoing optimism in the midcap and small cap space. Further, market breadth has also improved from previous session notably, with 80% of Nifty 500 stocks now trading above their 50-DMA and 49% above their 200-DMA compared to April month’s lowest reading of 27 and 15 respectively, clearly indicating improvement in market breadth.

• Key monitorable which would validate our positive bias going ahead:

• a) RBI's commentary on rate cut

• b) Persistent FII's inflow

• c) Further weakness in US Dollar index and Brent crude oil prices

• d) Bilateral Trade Agreement between India and US

• The index staged a recovery in the vicinity of lower band of the consolidation (25100-24500). We revise support base at 24200 as it is the gap zone support (24378-24164) and 38.20% retracement of recent rally (21743-24944).

Nifty Bank : 55903

Technical Outlook

Day that was :

The Bank Nifty, ended the session on a positive note, despite weak global cues . The index settled at 55903 , up 153 points . The Nifty PSU Bank index outperformed the benchmark and closed on a positive note and settled at 7126 , up by 2 .15 % .

Technical Outlook :

• The index started the week on a negative note and after the initial decline buying demand emerged in the vicinity of previous session’s low, making higher -high -low and close the session near day’s high . The daily price action formed a green candle with small lower wick, signaling strong demand at lower levels .

• Key point to highlight is that, the index is breaking out from contracting triangle and witnessed highest ever close since, 22nd April 2025 indicating strong momentum . Further, the index closed above previous five sessions high indicating resumption of uptrend . Going ahead, index is poised to challenge the all -time high level of 56000 and sustenance above it would open the door towards the 57 ,000 mark, as it is the external retracement of the fall from 56 ,098 –53 ,483 . Meanwhile, strong support is placed at 54 ,500 -54800 , which is the 61 .80 % retracement of the recent up -move (53 ,483 –55 ,903 ) and coincides with the gap area witnessed on 12th May (54 ,055 –54 ,442 ) . Hence, any decline from hereon would offer incremental buying opportunity .

• Structurally, the Bank Nifty is witnessing elongation of rallies followed by shallow retracements, which signifies a robust price structure . The recent up -move of 14 % is larger compared to the previous month’s 9 % rise . Additionally, the declines are getting shallower, with the recent one being 4 . 6 % versus 5 . 4 % in March 2025 . Furthermore, the index broke out of an eight -month falling trendline and surpassed its lifetime high, highlighting a robust structure .

• The PSU Bank index outperformed the benchmark and closed on a positive note. The index broke out from an eleven-month falling trendline on 19th May since then index is making higher - high -low indicating strong momentum on the upside . Bank Nifty is trading near all -time high whereas, PSU Bank index is still trading ~13 % below its all –time high, which presents a compelling case for a catch -up move . Meanwhile, immediate support on the downside is placed at 6700 , being the placement of 20 -day EMA

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