Trading Plan: Will Nifty Defend 23,000, Bank Nifty Stay Above 49,250?
Nifty: The Indian stock market witnessed intense selling pressure on February 11, as both the Nifty 50 and Bank Nifty faced sharp declines, forming long bearish candlestick patterns on the daily charts. With negative signals from technical indicators like the Relative Strength Index (RSI) and resistance levels capping any upside, experts believe that a “sell on rise” strategy remains ideal for traders.
With Nifty struggling to hold the 23,000 level and Bank Nifty at risk of breaking below 49,250, the question remains—will these indices stabilize, or are deeper corrections ahead?
Market Recap: February 11, 2025
- Nifty 50 plunged 310 points (-1.32%), closing at 23,072.
- Bank Nifty dropped 578 points (-1.16%), settling at 49,403.
- Market breadth strongly favored bears, with 2,386 declining stocks against just 231 advancing stocks on the NSE.
Nifty Outlook and Trading Strategies
Key Technical Levels:
- Resistance Levels: 23,250, 23,500, 23,800
- Support Levels: 23,000, 22,800, 22,500
Expert Analysis
Dhupesh Dhameja, Samco Securities
The Nifty is under strong bearish control, struggling to sustain any recovery. The 20-day Exponential Moving Average (EMA) is acting as a strong resistance, and with aggressive call writing at 24,000, the technical structure looks weak.
- Bearish sentiment is evident as the Put-Call Ratio (PCR) slipped below 0.60, indicating that traders are betting on further declines.
- A break below 23,000 could accelerate selling towards 22,800.
Strategy:
- Bear Call Spread: Buy 23,100 Call at ₹109, sell 22,850 Call at ₹269.50 (Feb 13 expiry).
- Risk: Maximum ₹6,712; Reward: Maximum ₹12,038.
Preeti K Chabra, Trade Delta
- The Fibonacci level of 23,189 was breached, indicating a bearish phase.
- The Nifty has been making lower highs and lower lows for five consecutive sessions, showing clear downtrend signals.
- RSI at 40.98 suggests a possible bounce, but selling pressure will likely cap gains.
Strategy:
- Bear Put Spread: Buy in-the-money (ITM) Put, sell out-of-the-money (OTM) Put to minimize cost while benefiting from the downtrend.
Ashish Kyal, Waves Strategy Advisors
- Nifty broke below 23,000 intraday, and the highest open interest (OI) is at the 23,000 Put strike, showing potential downside risk.
- A decisive move below 22,970 will confirm further declines toward 22,800.
Strategy:
- Short Nifty below 23,000, with a stop-loss at 23,100 and targets of 22,900 and 22,800.
Bank Nifty Outlook and Trading Strategies
Key Technical Levels:
- Resistance Levels: 49,700, 50,000, 50,500
- Support Levels: 49,000, 48,700, 48,500
Expert Analysis
Dhupesh Dhameja, Samco Securities
- Bank Nifty is witnessing sustained selling pressure, and the 50-day EMA has slipped below the 200-day EMA, confirming a “Death Cross” pattern.
- RSI below 50 signals weakening bullish momentum.
Strategy:
- Sell Bank Nifty below 49,500, with a stop-loss at 49,900 and target of 49,000-48,900.
Preeti K Chabra, Trade Delta
- The Bank Nifty has broken a key channel, indicating further downside.
- Options data shows unwinding in in-the-money Puts, further confirming bearish momentum.
Strategy:
- Sell Bank Nifty on any rise, targeting 48,906, with a stop-loss at 49,906.
Ashish Kyal, Waves Strategy Advisors
- The index has lost over 1,400 points in 3 days and retraced 50% of its prior uptrend.
- A break below 49,250 could accelerate selling toward 48,900 and 48,500.
Strategy:
- Short Bank Nifty Futures below 49,250, aiming for 48,900 and 48,500, with a stop-loss at 49,550.
Will Nifty and Bank Nifty Defend Their Key Support Levels?
The technical and derivatives data suggest a strong bearish grip, with resistance levels keeping upside gains in check. Unless Nifty reclaims 23,250 and Bank Nifty moves above 49,700, traders should remain cautious and follow a “sell on rise” strategy.
If 23,000 and 49,250 hold, we may see a temporary bounce, but unless key resistances are broken, the overall market trend remains weak.
Financial Ratios Snapshot
| Index | Current Level | RSI | 20-Day EMA | 50-Day EMA | 200-Day EMA | Key Support | Key Resistance |
|---|---|---|---|---|---|---|---|
| Nifty 50 | 23,072 | 40.98 | 23,450 | 23,612 | 23,800 | 23,000, 22,800 | 23,250, 23,500 |
| Bank Nifty | 49,403 | 46.59 | 49,700 | 50,000 | 50,200 | 49,250, 48,900 | 50,000, 50,500 |
Final Thoughts
The Nifty and Bank Nifty are at critical junctures, with bearish momentum dominating the market. If key support levels fail to hold, further declines are expected. Traders should use a disciplined risk management approach and stay prepared for volatility.
For now, the market sentiment remains “sell on rise,” and any bounce should be approached with caution.
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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.