Trade Setup for July 2: Nifty Eyes India-US Trade Deal and Q1 Earnings for Next Breakout

Nifty Outlook for July 2: Global and Domestic Catalysts Set the Tone

After gaining nearly 700 points over four trading sessions, the Nifty 50 is now in a phase of consolidation. On Tuesday, July 1, the index traded within a tight 90-point range but closed in positive territory, offering a glimmer of hope for bulls. Despite failing to surpass Monday's high, the Nifty’s ability to hold the crucial 25,500 mark for two consecutive sessions adds technical strength.

India-US Trade Deal in Focus

The spotlight now shifts to the much-anticipated India-US trade deal, which is reportedly in its final negotiation phase. With the July 9 deadline approaching, US Treasury Secretary's remarks have fueled optimism that a formal agreement could be signed soon. Such a development could act as a key trigger for the next leg of the market rally.

Quarterly Business Updates Begin

Back on the domestic front, Q1 business updates have started to roll in. Market watchers are closely monitoring numbers from large lenders and FMCG majors for insights into India’s consumption trends. These earnings will likely influence investor sentiment and sectoral momentum in the coming weeks.

Key Market Drivers: Reliance and Banking Stocks

Among the top gainers, Reliance Industries continues to be a major force. The stock has posted gains in four of the last five sessions and is just 5% shy of its record high. Brokerage firm Nuvama raised its price target for Reliance to ₹1,801, its highest yet, boosting investor confidence.

Another significant contributor was the Nifty Bank index, which closed 150 points higher after recovering over 300 points intraday. The PSU Bank index extended its winning streak to six consecutive sessions, adding a staggering ₹80,000 crore to its market cap during this rally.

Technical Outlook: Support and Resistance Levels

Analysts suggest that Nifty is undergoing a time-wise correction following the recent rally. Immediate support lies between 25,400–25,300, aligning with the 78.6% Fibonacci retracement level, while resistance is seen in the 25,670–25,740 zone.

Sudeep Shah of SBI Securities highlighted the formation of a Doji candlestick on the daily chart—indicating market indecision. This pattern often surfaces near potential reversal zones or during consolidation phases. A slip below 25,350 could push the index toward the next major support at 25,200, while breaching 25,630 may open the door for further upside.

Top Gainers on July 1 (3:57 PM)

Conclusion

As the Nifty consolidates after a strong run-up, investors are advised to track global developments—particularly the India-US trade deal—and key domestic earnings. Support from Reliance, PSU banks, and improved consumption signals could drive the index toward new highs if resistance levels are breached in the coming sessions.