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Nifty : 24891

Technical Outlook

Day that was…

Equity benchmark extended its decline for the Fifth consecutive session tracking weak global cues. Nifty settled the day at 24891, down 0.66%. Market breadth was in favor of declines, with an A/D ratio of 1:2 where broader markets mirrored the benchmark. Both Midcap and Small cap closed on a negative note down >0.55%. Sectorally, Barring Metal all indices closed in red. Where, Realty, IT and Pharma underperformed.

Technical Outlook:

* Index opened on a flat note and continued the decline making lowerhigh-low throughout the session where intraday pullbacks were shortlived. As a result, the daily price action formed a bear candle carrying lower-low, indicating extended breather.

* Key point to highlight is that, Index is undergoing healthy retracement of past three weeks 1000 points up move which hauled Nifty in the vicinity of 50-day EMA and 50% retracement filling the gap. With 570 points decline stochastic oscillator entered in over sold territory(10) indicating impending pullback. However, for such pullback to materialize a decisive close above previous sessions high would be the first sign of pause in the down move and will challenge the recent swing high of 25500 levels as broader structure remains intact, failure to do so strong support is placed at 24700 which is 61.80% retracement of the upmove from (24404-25448) coinciding with past two weeks low.

* Structurally, the rebound from April 2025 low till June 2025 high witnessed shallow retracement as it retraced 38.20% of the entire upmove while within the decline the pullback were limited to the tune to max 800 points the current upmove was >1000 points backed by across sector participation on the back of GST reforms which helped to improve market breadth while maintaining higher peak and trough intact, highlighting inherent strength. All eyes are on the progression of tariff negations. Any announcement on scrapping of additional 25% tariff or lowering reciprocal tariff rates would fuel further momentum in the market. Consequently, focus will shift towards export-oriented Textile, Capital Goods and Pharma stocks.

* In the current decline IT contributed the most as it declined 5% for the week tracking H1B visa fee hike and till any clarity emerges in this respect the index will continue its underperformance.

* On the domestic broader market front, in a bull market scenario, average decline in Midcap and Small cap indices have been 27% and 29%, respectively. Buying in such scenario has been fruitful with >50% returns in subsequent 9-12 months. In the month of April, after 23% and 27% correction in Midcap and small cap, indices witnessed a sharp rebound and made a higher base in the vicinity of 52-week EMA. Currently, Midcap index is shying away 6% from its All Time High while small cap index is 10% away from All Time High. Hence, focus should be on accumulating quality stocks on dip.

Nifty Bank : 54976

Technical Outlook

Day that was:

Equity benchmark extended its decline for the Fifth consecutive session tracking weak global cues. Nifty settled the day at 24891, down 0.66%. Market breadth was in favor of declines, with an A/D ratio of 1:2 where broader markets mirrored the benchmark. Both Midcap and Small cap closed on a negative note down >0.55%. Sectorally, Barring Metal all indices closed in red. Where, Realty, IT and Pharma underperformed.

Technical Outlook:

* Index opened on a flat note and continued the decline making lowerhigh-low throughout the session where intraday pullbacks were shortlived. As a result, the daily price action formed a bear candle carrying lower-low, indicating extended breather.

* Key point to highlight is that, Index is undergoing healthy retracement of past three weeks 1000 points up move which hauled Nifty in the vicinity of 50-day EMA and 50% retracement filling the gap. With 570 points decline stochastic oscillator entered in over sold territory(10) indicating impending pullback. However, for such pullback to materialize a decisive close above previous sessions high would be the first sign of pause in the down move and will challenge the recent swing high of 25500 levels as broader structure remains intact, failure to do so strong support is placed at 24700 which is 61.80% retracement of the upmove from (24404-25448) coinciding with past two weeks low.

* Structurally, the rebound from April 2025 low till June 2025 high witnessed shallow retracement as it retraced 38.20% of the entire upmove while within the decline the pullback were limited to the tune to max 800 points the current upmove was >1000 points backed by across sector participation on the back of GST reforms which helped to improve market breadth while maintaining higher peak and trough intact, highlighting inherent strength. All eyes are on the progression of tariff negations. Any announcement on scrapping of additional 25% tariff or lowering reciprocal tariff rates would fuel further momentum in the market. Consequently, focus will shift towards export-oriented Textile, Capital Goods and Pharma stocks.

* In the current decline IT contributed the most as it declined 5% for the week tracking H1B visa fee hike and till any clarity emerges in this respect the index will continue its underperformance.

* On the domestic broader market front, in a bull market scenario, average decline in Midcap and Small cap indices have been 27% and 29%, respectively. Buying in such scenario has been fruitful with >50% returns in subsequent 9-12 months. In the month of April, after 23% and 27% correction in Midcap and small cap, indices witnessed a sharp rebound and made a higher base in the vicinity of 52-week EMA. Currently, Midcap index is shying away 6% from its All Time High while small cap index is 10% away from All Time High. Hence, focus should be on accumulating quality stocks on dip.

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