Indices gained traction as concerns over Iran-Israel tensions began to subside, prompting a recovery in global risk appetite. As a result, benchmark indices closed the week on a strong note, with the Nifty ending at 25,637.80 and the Sensex at 84,058.90—both near their respective weekly highs.
With this, Analyst Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities interacted with ET Markets regarding the outlook on Nifty and Bank Nifty along with an index strategy for the upcoming week. Following are the edited excerpts from his chat:
How would you characterize the overall market structure in India right now? Are we in a clear uptrend or likely to see a range?
The squeeze sets the stage—the breakout steals the show. For 31 trading sessions, the Nifty moved in a narrow consolidation range, building silent pressure with every passing day. Like an audience holding its breath before the climax, the market was coiling, waiting for a trigger. That moment finally arrived this week, as Nifty broke free from its range-bound structure, delivering a sharp upside move that ended the week above the 25,600 mark, with a 2.09% gain.
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More importantly, this move led to the highest weekly close since September 2024, confirming that the breakout wasn’t just symbolic—it was structural. On the weekly chart, the index has formed a sizeable bullish candle, a visual expression of strong momentum and renewed buying conviction.This breakout was not an isolated event. It comes with improving breadth across sectors such as Financial Services, Private Banks, Oil & Gas, Infrastructure, and Auto, many of which have also seen breakout patterns of their own. Backed by strong technical indicators and firm sectoral participation, Nifty now looks poised to extend its northward journey in the coming weeks and is likely to test the level of 25,800, followed by 26,100 in the short term. While on the downside, the zone of 25,400-25,350 is likely to provide a cushion in case of any immediate decline.
The stage was set in silence—now, the spotlight is on the bulls.
What does rollover data indicate for Nifty and Bank Nifty?
Throughout the June series, Nifty futures largely remained confined within a narrow trading band of just 732 points, reflecting a phase of indecisiveness and range-bound activity. Since mid-May, the index has been oscillating in a tight consolidation zone between 25,307 to 24,575 levels, suggesting a lack of clear directional bias among market participants.
Notably, during these 31 trading sessions, the price action was characterized by frequent gap-up or gap-down openings, indicating elevated overnight volatility driven by trade war concerns, the escalation of war in the Middle East, and institutional flows. However, despite these volatile starts, the intraday moves largely lacked sustained momentum, reflecting traders’ hesitancy to commit in either direction.
However, on the expiry day, the Nifty futures finally staged a decisive breakout from this prolonged consolidation phase and ended the June series above the 25,500 mark, registering a healthy gain of 2.69%. This breakout not only signals a potential shift in short-term sentiment but also sets a positive tone for the July series. From a derivatives perspective, the rollover of Nifty Futures increased to 79.53% in June, slightly higher than May’s 79.10% and also above the three-month average of 79.24%, indicating continued participation and positioning by traders heading into the new series.
The number of shares rolled surged to 162 lakhs compared to 149 lakh last month. However, the rollover cost dipped to 0.25%, below the three-month average of 0.43%.
Bank Nifty Futures traded in a narrow 1,800-point range during the June series, marking the second straight month of muted price action. However, it gained momentum on the expiry day, closing above 57,200 with a 2.48% gain. From a derivatives standpoint, the rollover of Bank Nifty Futures declined to 75.75% in the June series — a noticeable drop compared to May’s 79.29% and also below the three-month average of 76.70%. This suggests a relatively cautious stance among traders and possibly a lighter carry-forward of positions into the July series.
Adding to this, the rollover cost dipped to 0.07%, significantly lower than the three-month average of 0.32%, reflecting a cautious rollover with limited aggressive long buildup.
Bank Nifty has performed well recently—what technical drivers are signaling strength or weakness here?
Bank Nifty has been displaying notable strength lately, backed by a series of compelling technical indicators. Most prominently, the index has registered fresh all-time highs over the last two trading sessions—clearly outperforming the broader Nifty index, which remains nearly 2.5% below its own record high. This relative outperformance reflects strong sectoral leadership from banking stocks.
A key bullish trigger has been the recent Stage-2 cup pattern breakout on the daily chart—a well-known continuation formation that typically precedes a strong upward trend. Furthermore, Bank Nifty continues to trade above all its crucial short-term and long-term moving averages, signaling well-supported price action. Momentum indicators such as RSI and MACD remain firmly in bullish territory on both daily and weekly timeframes, highlighting sustained strength and trend acceleration.
In summary, the alignment of breakout patterns, moving average support, and strong momentum across timeframes suggests that Bank Nifty is likely to maintain its bullish trajectory. As per the measure rule of cup pattern, the upside target is placed at 59,000 level. While, on the downside, the zone of 56,800-56,700 is likely to provide the cushion in case of any immediate decline.
What is the FII action indicating right now?
They have now turned net buyers for the fourth consecutive month, signaling a steady return of confidence in Indian equities. This sustained inflow reflects their growing conviction in the strength and resilience of the domestic market, especially amid global uncertainties and policy shifts.
Notably, in the derivatives segment, the FII long-short ratio in index futures has climbed to 38.43%, marking one of the highest levels seen in the recent past. A rising long-short ratio indicates that FIIs are increasingly building long positions—a bullish sign that suggests they are anticipating further upside in the near term.
This combination of consistent cash market inflows and a favorable derivative positioning reinforces the broader sentiment that FIIs are aligning themselves with India’s structural growth story and short-term momentum. If this trend continues, it could provide further support to the market’s upward trajectory.
Which index seems to perform well?
Several sectoral indices are showing strong bullish signals and are poised to outperform in the short term based on their technical setups:
- Nifty Private Bank, Nifty Financial Services, Nifty Oil & Gas, and Nifty Infrastructure have all registered horizontal trendline breakouts on the daily chart. This is a bullish development, indicating a shift from consolidation to potential upside momentum.
- Nifty Auto has given a downward sloping trendline breakout, another positive sign. The daily RSI is in the bullish zone and trending higher, reinforcing the likelihood of continued strength in this space.
- Nifty India Tourism is on the verge of breaking out from a symmetrical triangle pattern on the daily timeframe. All major moving averages and momentum indicators are aligned positively. A sustained move above the 9300 level could trigger a fresh bullish leg in the index.
- In addition to the above, Nifty Healthcare, Pharma, and Metal indices are also showing signs of relative strength and are expected to outperform in the near term, backed by improving price structures and momentum indicators
What’s the take on the metal index that has really performed well in the last few sessions?
Currently, the Nifty Metal is trading above its short and long-term moving averages, which is a bullish sign. Further, the daily RSI is in bullish territory, and it is in rising mode, which is a bullish sign. However, on Friday, the index has witnessed minor profit booking after reaching a high of 9,678. Going ahead, any sustainable move above the level of 9700 will lead to a sharp upside rally in metal space.
If there was one stock you had to pick for our readers that you’re busy on, which stock would it be? What entry, stop-loss, and target levels do you derive from its charts?
APOLLOHOSP: On a daily scale, the stock has given an Ascending Triangle pattern breakout along with robust volume. Currently, the stock is trading above all the moving averages, and these averages are in rising mode. The Daily RSI has also given a 2-month consolidation breakout, which suggests pickup in upside momentum. Hence, we recommend accumulating the stock in the zone of Rs 7,320-7,280 level with a stoploss of Rs 7,080. On the upside, it is likely to test the level of Rs 7,750 in the short term.
So, any stocks that you have picked for our traders?
Technically, Hindustan Petroleum, HDFC Life, Ultratech Cement, ICICI Prudential Life Insurance, Indigo, Ambuja Cement, LT Foods, and Glaxo are looking good.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
