Nifty PSU Bank realtively outperformed for the day gaining 1.37% - ICICI Direct
Nifty :23689
Technical Outlook
Day that was.. Indian equity indices extended their winning streak into a second consecutive session, tracking positive global cues following the Trump-Xi summit. The benchmark Nifty 50 index settled at 23,689, marking a gain of ~1.20%. The broader market mirrored the headline index, as evidenced by a ~1% advance in the Nifty Midcap index. Barring the IT sector, buying pressure was broad-based across all major segments, with Pharma, Metals, and BFSI emerging as the primary growth drivers.
Technical Outlook:
• The index opened on a positive note and initially declined; however supportive efforts emerged near the 50% retracement level of the previous session's move. The daily price action formed a 'morning star' pattern, indicating a potential bullish reversal.
• The index witnessed a sharp rebound after retracing 50% (23,250) of its previous 11% move, coinciding with the former gap support from 7 April 2026. Following five consecutive sessions of decline, the index closed above its previous session's high, signaling a pause in the current corrective phase. Going ahead, we expect follow-through strength to continue, eventually driving the index toward the upper band of consolidation at 24,500.
• Structurally, over past four weeks index has retraced merely 50% of preceding three weeks rally (11%). This slower pace of retracement has helped index to cool off the overbought conditions and make market healthy. • On broader market perspective, both Nifty Midcap and Smallcap has witnessed a “Hammer” like candle in the vicinity of short-term 20-day EMA, indicating higher base formation near key moving average.
• In the process we expect bouts of volatility to remain elevated tracking geopolitical tension and ongoing earning season. Hence one should focus on accumulating quality stocks backed by strong Q4 earnings as key support is placed at 23100 being 61.80% retracement of previous move (22182-24601) and the price gap support from 7th April 2026. Our constructive bias is further validated by following observations:
1. Despite current corrective phase, broader market has seen marginal deterioration in the market breadth as currently 70% of the Nifty 500 components are trading above their 50 days SMA compared to last week’s reading of 72%. While for 200 days SMA similar reading has improved from 44 % to 50% which is yet higher than last month’s low of 15%. This collective strength, paired with better-than-expected earnings in key pockets, augurs well for durability of ongoing up move.
2. While Midcaps are already trading at record highs, the Nifty remains 8% below its previous peak. Furthermore, 18 months breakout on the Nifty 500 vs. Nifty 100 ratio chart suggests that the broader market is positioned to continue outperforming its large-cap peers 3. Historically, the Nifty shares a positive correlation with its global peers. The current resilience across US and Asian equities provides a strong external tailwind, creating a favorable setup for the domestic market to narrow the performance gap through a catch-up activity Key Monitorable: Rupee trading near record low ~$95.80
Intraday Rational:
• Trend – Higher high-low formation after 5 sessions decline confirms conclusion of corrective bias
• Levels - Buy around 80% retracement of yesterday range
Nifty Bank : 54128
Technical Outlook
Day that was: The Bank Nifty Index snapped its five day decline and closed on positive note for the day at 54129 up 1.26%. Nifty PSU Bank realtively outperformed for the day gaining 1.37%.: The Bank Nifty Index snapped its five day decline and closed on positive note for the day at 54129 up 1.26%. Nifty PSU Bank realtively outperformed for the day gaining 1.37%.
Technical Outlook:
• Index recovered initial decline and inched upward above previous session high. Consequently, daily price action resulted into Bull candle with lower shadow , indicating buying demand at lower levels.
• Index has rebounded after taking support in vicinity of 61.8% retracement level and gap area formed on 20th March signaling supportive efforts from lower levels. Index has closed above its previous session high indicating conclusion of corrective phase and resumption of upmove. Going ahead we expect Index to head higher towards 56600 levels being 200-day EMA coinciding with 80% retracement of current decline (57450-53194).
• Post slower pace of retracement wherein Index over four weeks has retraced merely 50% of earlier 3 weeks rally, we believe Index to for higher base and gradually head towards 56600 levels. Strong support is placed around 52800 being gap-area formed on 7th April and 61.8% retracement of entire April rally (49954-57456).
• Nifty PSU Bank has rebounded after taking support at its 52-week EMA after four weeks of correction which has been held Since May 2025 acting as strong support. Thereby, sustainability above 52 weeks EMA on a weekly closing basis is important to watch out for as that would help into to stage a recovery going ahead
• Intraday Rational:
• Trend- Higher high-low formation after 5 sessions decline confirms conclusion of corrective bias
• Levels- Buy around 80% retracement of yesterday range
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