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Nifty :25423

Technical Outlook

Day that was…

Equity benchmark advanced for the Third straight session on optimism around Fed rate cut and settled at 25423, up 0.37%. Sectorally, PSU Bank, Realty and Oil & Gas were the laggards. Whereas, Pharma, IT and FMCG outshone.

Technical Outlook:

* Nifty started the day with a gap up, and approached near our target of 25500. Subsequently, profit booking seen in the vicinity of 1-year falling trendline. Yet, fag-end buying demand helped index to retain most of early session’s gains. As a result, the daily price action formed a red candle carrying higher-high-low with long lower shadow, indicating supportive efforts at lower levels.

* The series of higher low formation over ninth session in a row highlight buying demand at elevated support base. However, one should note that, over past three weeks index has rallied 4% without any breather. Thereby, possibility of temporary breather at higher level can not be ruled out which will make market healthy and pave the way to challenge 25500 in coming weeks. Thereby focus should be on accumulating quality stocks on dips. Further, the US Dollar index has been sustaining below the immediate support of 97, that bodes well for emerging markets. Looking at the improvement in the broader structure, we maintain our support at 24900 being 50% retracement of the upmove from (24404-25448).

* On the broader market front, Historically, Midcap nifty in a bull market scenario had witnessed an average decline of 27%.In current scenario, after the fall of 23% in April 2025 Midcap nifty witnessed a sharp bounce and made a higher base in the vicinity of 52-week EMA making higher-high on monthly time frame supported by improvement in % of stocks above 50 days SMA from a month earlier at 27 to currently at 67 indicating, conclusion of corrective bias and resumption of upmove. Any breather from here should be considered as buying opportunity.

* On the market breadth front, the % of stocks above 50 days SMA have once again maintained the rhythm of bouncing from bullish support zone of 25%. The current jump to 64% clearly signifies broadening of market participation.

* Key monitorable:

* a) Development of Bilateral trade deal negotiations.

* b) Breakdown from one year falling trend line in US 10 Year Bond Yield

Nifty Bank : 55727

Technical Outlook

Day that was:

Bank Nifty extended its winning streak for twelve-consecutive session fueled by US FED rate cut and settled at 55,727 up 0.42%. Nifty Private Bank index has mirrored the benchmark, ending the day at 27,148 up 0.44%

Technical Outlook:

* Bank nifty opened the session with a positive gap-up, faced profit booking during the first half, while in the latter half supportive buying demand emerged near the previous day’s high, indicating resilience and scope for continuation of upward momentum. Consequently, the daily price action formed a bull candle with wick on lower end indicating buying demand emerged at lower levels and reinforcing the positive undertone.

* Key point to highlight is that index continued with its higher-highlow structure for twelve-consecutive day and maintained the position well above the 20-day EMA. Index has witnessed follow through strength after closing above the 50-day EMA post sevenweeks, signaling revival in uptrend. Going forward, any positive outcome from ongoing tariff negotiation could act as a trigger, driving the index towards 56800 being 80% retracement of the preceding decline (57628-53578). On the momentum front, weekly stochastic oscillator has maintained its bullish crossover, with reading of 51, reflecting continuation of current upward momentum. Hence, with the above improvement in index we revise our support to 54700 being 50% retracement of the current up move (53,561-55,540) and any decline from current level should be viewed as a buying opportunity.

* Structurally, Since Dec-22 the intermediate correction within channelized move has been arrested within 10%. While buying near 52 weeks EMA has been fruitful over next 8 months. With current 7% correction Bank Nifty witnessed elevated buying demand in the vicinity of 52 weeks EMA, indicating formation of a strong base and setting the stage for resumption of the uptrend.

* PSU Bank Index has underperformed the benchmark and closed on a negative note. Index has witnessed a minor profit booking after a positive gap-up, indicating breather from recent strong rally. However, Index managed to hold above its recent cup & handle pattern, indicating sustaining stability of an uptrend would open the door for the further upside towards its measured move target at 7690. However, immediate support is placed near 6970 being 50- day EMA

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