Trading Plan: Will the Southward Journey Continue in Nifty, Bank Nifty?
Trading Plan: The Indian stock market has been under pressure, with the Nifty 50 and Bank Nifty witnessing selling pressure in recent sessions. With key indices struggling below crucial moving averages, traders and investors are questioning whether the downtrend will continue or if a reversal is on the horizon.
In the past week, Nifty 50 has lost its grip over key support levels, including the 50-day and 200-day Exponential Moving Averages (EMAs), forming a lower highs-lower lows pattern. If the Nifty 50 breaches the 23,400 level, which aligns with the 50-week EMA, a further decline toward 23,250 or even lower levels could be seen. Conversely, holding above this level might push the index back toward 23,800.
Similarly, Bank Nifty faces strong resistance at 50,500-51,000 and could witness selling pressure if it slips below the 50,000 mark, dragging it towards 49,600-49,500. Traders are advised to remain cautious as the market continues to consolidate within a tight range.
Nifty Outlook and Trading Strategy
Rajesh Bhosale, Technical Analyst at Angel One
- The bullish gap around 23,400, followed by 23,250, is a critical support zone. If these levels break, Nifty could drop toward 23,000 or lower.
- On the upside, resistance remains at 23,800 (Tuesday’s high), 23,900 (89 DEMA), 24,000 (200 DSMA), and 24,250 (previous swing high).
- Strategy: Buy on dips, but be cautious at resistance zones.
| Key Levels | Support | Resistance |
|---|---|---|
| Nifty 50 | 23,400, 23,250 | 23,800, 24,000 |
Rajesh Palviya, Senior Vice President, Axis Securities
- Resistance at 23,800-24,000: A breakout above this could trigger buying momentum toward 24,000-24,200.
- Key Support: The 20 SMA at 23,294 is a critical level. A breakdown below 23,450 could push the index toward 23,300-23,000.
- Strategy: Buy Nifty Futures around 23,300, with a stop-loss at 23,150 and targets of 23,650-23,800.
| Key Levels | Support | Resistance |
|---|---|---|
| Nifty 50 | 23,300, 23,100 | 23,650, 23,800 |
Ameya Ranadive, Senior Technical Analyst, StoxBox
- The 50-day and 200-day EMAs are strong resistance points, which Nifty needs to clear for an upside rally.
- FIIs hold 84% short positions, indicating a bearish sentiment. However, short-covering could trigger a sharp rally if sentiment shifts.
- Options Data: The 24,000 Call has high open interest, indicating resistance, while the 23,000 Put sees strong support.
- Strategy: Buy Nifty on dips towards 23,450, targeting 23,625-23,785.
| Key Levels | Support | Resistance |
|---|---|---|
| Nifty 50 | 23,350, 23,500 | 23,800, 24,000 |
Bank Nifty – Outlook and Positioning
Rajesh Bhosale, Technical Analyst, Angel One
- Support: The 20 DEMA at 49,600 and a bullish gap around 49,480-49,370 will act as key support zones.
- Resistance: The 200 DMSA at 50,900-51,000 remains a strong hurdle.
- Strategy: Buy on dips but book profits at higher levels.
| Key Levels | Support | Resistance |
|---|---|---|
| Bank Nifty | 49,500, 49,300 | 50,900, 51,000 |
Rajesh Palviya, Axis Securities
- Bank Nifty closed above the previous week’s high, indicating a positive bias.
- If the index sustains above 50,500, it may move toward 50,650-51,000.
- A breakdown below 50,000 could push Bank Nifty to 49,700-49,000.
- Strategy: Buy Bank Nifty Futures near 49,900, with a stop-loss at 49,750 and a target of 50,400-50,500.
| Key Levels | Support | Resistance |
|---|---|---|
| Bank Nifty | 49,850, 49,650 | 50,200, 50,500 |
Ameya Ranadive, StoxBox
- Price is consolidating between the 50-day and 100-day EMAs, signaling a potential breakout soon.
- Options Data:
- 52,000 Call has strong resistance.
- 49,000 Put sees heavy open interest, indicating support.
- Strategy: Wait for a breakout before taking new positions.
| Key Levels | Support | Resistance |
|---|---|---|
| Bank Nifty | 50,000, 49,700 | 50,500, 50,750 |
Final Thoughts
Will the Downtrend Continue?
- For Nifty 50: The index is trading in a range between 23,250 and 23,800. A decisive breakout will set the next directional move.
- For Bank Nifty: The index is consolidating between 49,500 and 51,000. A breakout above 51,000 could trigger a strong rally.
- Trading Strategy:
- Buy on dips near support levels.
- Book profits at key resistance zones.
- Wait for a breakout before initiating fresh positions.
With technical indicators showing mixed signals, traders should remain cautious and follow disciplined stop-loss strategies. The coming sessions will determine whether Nifty and Bank Nifty break out of consolidation or continue their downward journey.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.