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Nifty : 25051

Technical Outlook

Day that was…

* The Indian equity benchmark closed on a positive note and settled at 25,077, up 0.26%. Market breadth was in favour of advance with an A/D ratio of 1.5:1. Both Midcap and small cap indices closed positive up 0.46% and 0.29%, respectively. On the sectoral front, the IT sector staged a sharp rebound (+2.84%) after prolonged underperformance, while FMCG and Realty indices also outperformed. Conversely, Pharma and BFSI sectors emerged as the major laggards

Technical Outlook:

* Nifty saw a break through above the prior two session high range and closed above the key psychological 25000 mark after threeweeks. The daily price action resulted in a bull candle following higher-high-low price structure throughout the day, indicating all dips were bought into and closed the session near the higher end of the day.

* Key point to highlight is that Index has been sustaining above its 50-day EMA for a third-consecutive session. The formation of higher-high -low pattern, coupled with significant improvement in market breadth (currently 44% of nifty 500 universe stock is trading above the previous week reading of 29), indicates broad base participation. Additionally, GST related reforms have boosted the market sentiment, which could open the door for an extension of the ongoing pullback rally toward 25,400 which is 80% retracement of the prior decline (25670-25344) and previous gap resistance.

* Despite recent tariff headwinds, the Nifty has managed to consistently sustain above the 24,500 mark on a weekly closing basis. Moreover, the index has formed a sequence of higher highs over the past five consecutive sessions, indicating that much of the negative sentiment around tariff developments has likely been priced in. Looking ahead, investor focus remains firmly on signals from the upcoming Jackson Hole symposium, particularly remarks from Fed Chair Jerome Powell. A dovish tone from the Fed could act as a positive trigger for global equity markets, including the Nifty. Hence, we recommend focusing on accumulating quality stocks especially those poised to benefit from next-generation GST reforms in a staggered manner. Accordingly, we revise our key support level upward to 24,700.

* Key monitorable to watch out for in current volatile scenario:

* 1.Development on India-US trade tariff negotiations

* 2.Jackson Hole and U.S. Fed minutes (August 21-23)

* 3.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 : 55698

Technical Outlook

Day that was:

* The Bank Nifty ended the day on a negative note, settling at 55,698 down 0.30%. The Nifty Pvt Bank index mirrored the benchmark, ending the day at 26,940 with a decline of 0.36%..

Technical Outlook:

* The daily price action formed a small bearish candle, highlighting a pause after the recent sharp up move. The index opened within the previous session’s range and, after an early dip, witnessed supportive efforts emerging near the previous session’s low. suggesting a phase of breather of the ongoing uptrend.

* Bank Nifty is undergoing a healthy phase of retracement, having retraced nearly 50% of the recent up move (54,905–56,156). Importantly, this retracement aligns with support from the 10-day EMA, reinforcing the underlying strength of the trend. Furthermore, the price action continues to unfold above its rising trendline support and 100- day EMA, a key structure that has been intact since April 2025, indicating that the broader uptrend remains well preserved.

* A key point to note is that despite tariff-related concerns, Bank Nifty managed to sustain above the 54,900 mark on a weekly closing basis. Hence, any short-term pullback should be interpreted as an opportunity to accumulate. Going ahead, market attention will remain on cues from the Jackson Hole symposium, where remarks from Fed Chair Jerome Powell could act as a pivotal sentiment driver. A dovish commentary from the Fed is likely to bolster global risk appetite, serving as a positive trigger for Bank Nifty as well. Looking at the robust price structure we expect Bank Nifty to eventually head towards 56500 in the coming weeks.

* 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 also mirrored the benchmark and closed lower. Moreover, the index has formed a sequence of higher highs (as per Dow-theory) over the past twelve sessions. The index has retraced close to the 38.2% level of its preceding 20% rally from 6,052 to 7,250 and rebounded above 7,000 mark, suggesting renewed strength, while the Bank Nifty consolidates within 3% of its all-time high, PSU Banks continue to lag significantly, trading 12% below their peak. This presents a potential catch-up opportunity for the sector.

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