Trading Plan: Will Bank Nifty continue to outperform Nifty 50?
Trading Plan for Nifty
The market rebounded with moderate gains, hitting a new high as well as an upward sloping resistance trendline on September 16. The Nifty 50 formed a bearish candlestick pattern on the daily charts but maintained a higher highs-higher lows formation, with a positive crossover in momentum indicators. As long as the index sustains below 25,400 on a closing basis, consolidation is likely to continue with support at 25,200. However, above 25,400, the levels to watch are 25,500-25,600. The Bank Nifty is expected to move towards 52,500, with support at 52,000, experts said.
On Monday, the Nifty 50 climbed 27 points to close at 25,384, while the Bank Nifty ended at 52,153, up 215 points. On the NSE, 1,225 shares advanced, while 1,267 shares declined.
Nifty Outlook and Strategy
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities
The Nifty 50 surpassed its previous swing high above 25,300, technically confirming a higher top. The crucial support on a positional basis is now at 24,700, with the upside target coming in at 25,800, and thereafter, 26,000. From a derivatives perspective, the highest open interest on the Call front is at 25,400 and 25,500 in the near term, which could lead to a further breakout if surpassed. On the lower side, 25,200 and 25,000 levels have the highest open interest on the Put side, hence the range is 25,200 to 25,400. Beyond this, the range extends to 25,000-25,500. The index has closed above its maximum pain and modified maximum pain levels of 25,350 and 25,181, respectively, indicating a bullish sentiment in the short term, with these levels acting as crucial support.
Key Resistance: 25,400, 25,500
Key Support: 25,200, 25,000
Strategy: Buy Nifty 50 with a stop-loss of 25,200 and a target of 25,500 and 25,700.
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Mehul Kothari, DVP – Technical Research at Anand Rathi
Nifty made another new high near the 25,450 level but failed to close at that level. On the daily scale, narrow-range bodies have been observed over the past few sessions, indicating some exhaustion. Additionally, the negative divergence in the daily RSI (Relative Strength Index) suggests some profit-booking from higher levels. Traders are advised to remain cautious from this point.
Key Resistance: 25,500, 25,700
Key Support: 25,300, 25,000
Strategy: Sell Nifty Futures below 25,350 with a stop-loss of 25,500 and a target of 25,050.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart
On the technical charts, Nifty is trading at its all-time high, with 25,500 acting as immediate resistance. A breakout above this level could trigger a rally toward 26,000. On the downside, 25,000 is a crucial support level. Unless Nifty breaks below 25,000, bullish momentum is expected to continue, but any move below this level may trigger profit-booking.
Key Resistance: 25,500, 25,800, 26,000
Key Support: 25,200, 25,000
Strategy: Consider buying on dips near 25,200, with a stop-loss at 24,800 and a target of 26,000.
Bank Nifty – Outlook and Positioning
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities
The Bank Nifty has also provided a breakout above its crucial resistance level of 52,000, with the next technical targets at 53,000 and 53,350. From a derivatives point of view, the Put Call Ratio (PCR) is at 1.25, which is bullish. The maximum open interest is seen at 52,500 and 53,000 on the Call side, while on the Put side, it is at 52,000, 51,800, and 51,500, indicating strong support on the lower end. Private sector banks have reversed due to short covering, potentially providing support to drive the index higher. The maximum pain and modified maximum pain levels are at 52,000 and 51,888, respectively, and the index is trading well above these levels, suggesting bullish sentiment, with these levels providing lower-end support.
Key Resistance: 52,500, 53,000
Key Support: 52,000, 51,800, 51,500
Strategy: Buy with a stop-loss of 51,500 and target of 53,000 and 53,350.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart
Bank Nifty closed above the critical resistance level of 52,000. A decisive move above this level could trigger a meaningful short-covering rally toward its previous all-time high of 53,357, with 52,500 being an intermediate hurdle. On the downside, 51,200 is the immediate support, while the 100-day moving average (DMA) around 50,500 serves as a more critical support level. A breach below this could change market sentiment.
Key Resistance: 52,500, 53,000, 53,357
Key Support: 51,600, 51,200, 50,500
Strategy: Consider buying on dips near 51,600, with a stop-loss at 51,200 and a target of 53,000.
Mehul Kothari, DVP – Technical Research at Anand Rathi
The Nifty Bank index confirmed a breakout on the daily scale, with the 100 percent extension of the previous move nearing 52,500. In the coming sessions, banking stocks might have to try really hard to bring the index towards 53,000 and higher levels.
Key Resistance: 52,500, 53,000
Key Support: 52,000, 51,500
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