_Morning Snippet:- 03rd June 2025_ *Index Observation* Nifty continues to remain locked within its 2% band for the 12 trading days now. With 25k acting as a strong supply zone, it’s necessary for the index to close above 25050 for negation of its potential downside towards 24300 / 24100 as the index has had a strong run up in the past couple of weeks despite geopolitical challenges without a 2% pullback. With Bank Nifty closing at the highest ever level on weekly charts on Friday, the index has also given a short-term bullish flag breakout on daily charts. Dips below 55000 odd levels are likely to get bought for 56200 targets however this bullish set up negates below 54500 as the index is not in sync with broader Nifty. BSE Sensex weekly expiry is scheduled for today while Nifty 50 weekly expiry is scheduled for Thursday followed by RBI’s rate decision on Friday. *Interesting Observation* On May 19th, we discussed the likelihood of small-cap stocks outperforming large-caps, supported by a breakdown in the Nifty 50/Nifty Smallcap 100 ratio chart. Since then, the ratio has weakened further, breaching a key role-reversal support level—reinforcing our thesis. Performance since our initial note clearly reflects this shift: the Nifty Smallcap 100 has risen 2.5%, while the Nifty 50 has declined by 0.9%. The ratio chart continues to trend lower, suggesting small caps may still have room to outperform. Based on the current structure, we ascertain an additional ~5% outperformance potential for small caps in the near term. *DERIVATIVES | Trade Setup* Cash Market Activity FII: ₹ -2,589 crore DII: ₹ 5,313 crore *Week-to-Date (WTD)* FII: ₹ -2,589 crore DII: ₹ 5,313 crore *Month-to-Date (MTD)* FII: ₹ -2,589 crore DII: ₹ 5,313 crore *F&O Cues* FIIs have added 5k short contracts in last trading session. Their net position now stand at 89k short contracts. In the options segment, the 24500 strike to act as support, while the 25000 strike remains a key resistance. *New 52 Week High Low Data* *Large Cap:* New 52 Week Highs: 1 New 52 Week Lows: 1 *Mid Cap:* New 52 Week Highs: 2 New 52 Week Lows: 1 *Small Cap:* New 52 Week Highs: 2 New 52 Week Lows: 1 *NIFTY500:* New 52 Week Highs: 5 New 52 Week Lows: 3