Trading Plan: Can bears drive Nifty 50 toward 24,000, Bank Nifty to 58,600 amid deepening US-Israel-Iran conflict?

Nifty Trading Plan for March 4

• Bears to tighten their grip over the market as risk-off trade may increase further
• Bears to increase pressure on Nifty and target 24,300–24,000 zone
• If Bank Nifty decisively breaks 59,150–59,050 support zone, 58,600 can't be ruled out

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Bears are expected to tighten their grip over the market as the risk-off trade may increase further amid the deepening US-Israel-Iran conflict and surging oil prices, while momentum and technical indicators are consistently signaling a sell. After sinking 1.25 percent each in the past two sessions, experts expect the bears to increase pressure on Nifty and target the 24,300–24,000 zone in the upcoming sessions, though there is a possibility of some recovery later. On the contrary, 25,000 may remain a crucial resistance level. Meanwhile, if Bank Nifty decisively breaks the 59,150–59,050 support zone (previous day's low and 100-day EMA), 58,600 can't be ruled out; however, 60,000 is likely to act as a hurdle on the higher side.

On March 2, the Nifty 50 fell 313 points (1.24 percent) to 24,866, while the Bank Nifty plunged 689 points (1.14 percent) to 59,840, with weakening market breadth. A total of 2,501 shares were under pressure compared to 474 advancing shares on the NSE.

Nifty Outlook and Strategy

Aditya Thukral, Founder & Analyst of AT Research & Risk Managers

Nifty 50 took support around the previous swing low of 24,578 on Monday, which is an important level for the medium-term sideways trend to hold. However, with the escalation of the conflict in the Middle East, the index is set to open with another big gap on the downside, eventually breaking the major support of 24,570, which ruins the medium-term structure for bulls.

The formation of lower highs and lower lows, along with the index sustaining and closing below the 20-day, 50-day, 100-day, and 200-day EMAs, with all these EMAs sloping downwards, depicts a clear downtrend. For any stability, Nifty 50 needs to stay and close above 24,570 for at least a couple of days.

Positioning/volumes in the derivatives segment were reduced considering the increase in risk and volatility, with VIX closing 25 percent higher than the previous trading session. In fact, a break of 24,300 will create panic in terms of aggressive long unwinding along with short build-up.

Key Resistance: 24,610, 24,900

Key Support: 24,300, 23,900

Strategy: Sell Nifty Futures below/around 24,700 with a stop-loss of 24,800, targeting 24,500.

Jigar S Patel, Senior Manager - Equity Research at Anand Rathi

Considering the weak global cues and rising geopolitical tensions, the Nifty 50 continues to trade significantly below its 200-day DEMA, placed around 25,241, indicating a weak broader trend. However, momentum indicators are showing early signs of exhaustion.

The daily RSI is hovering near 35, while MACD is approaching a potential reversal zone, suggesting a possible technical bounce. With the trading week truncated due to the Holi holiday and ongoing tensions between the US, Israel, and Iran, volatility may persist, including the risk of another gap-down opening mid-week.

Key Resistance: 25,000, 25,150

Key Support: 24,300, 24,000

Strategy: Buy Nifty Futures in a staggered manner between 24,450–24,350, with a stop-loss of 24,000, targeting 25,000.

Jay Thakkar, Head of Derivatives and Quant Research and Vice President at ICICI Securities

Nifty has closed below the 25,000 level, which had the highest Put base for this entire series, and a close below the same is not a positive sign in the short term. The index, however, has managed to hold the 24,800 level on a closing basis, which is also the same as the Budget day’s close. Now, a close below the same will indicate further weakness, whereas on the upside, until the index closes above 25,500 levels, the overall trend will remain sideways to negative.

India VIX closed well above 17, indicating that the short-term trend is in the grip of the bears. The next major support below 24,800 is 24,500 on a closing basis, and below that, 24,200 levels.

Key Resistance: 25,000, 25,500

Key Support: 24,500, 24,200

Strategy: Sell Nifty Futures below 24,700, with a stop-loss above 25,000, targeting 24,500 and 24,200.

Bank Nifty - Outlook and Positioning

Jigar S Patel, Senior Manager - Equity Research at Anand Rathi

Technically, the Nifty Bank index continues to trade below its 50-day DEMA, placed around 60,000, indicating underlying weakness in the short term. Additionally, the daily ADX remains below 20, suggesting a lack of strength in the prevailing move and hinting at range-bound action.

With the ongoing tensions between the US, Israel, and Iran, volatility is likely to remain elevated, including the possibility of another gap-down opening mid-week.

Key Resistance: 60,000, 60,200

Key Support: 58,700, 58,500

Strategy: Buy Bank Nifty Futures in a staggered manner between 59,300–59,000, with a stop-loss of 58,500, targeting 60,200.

Aditya Thukral, Founder & Analyst of AT Research & Risk Managers

Global selling is spreading to the Indian banking index as well, where prices were seen closing below the 20-day and 50-day EMAs, with both EMAs now sloping downwards, which is negative for the short term.

However, the index is on the verge of breaking the 100-day EMA, and the only hope for bulls remains if the index takes support at the 200-day EMA, which is highly unlikely considering that the escalation of the Middle East conflict doesn’t seem to be ending anytime soon. Longs can wait for stability, which will only be seen if it stays and closes above 59,200 for at least a couple of days.

There hasn’t been much evidence from positioning in the derivatives segment; rather, expect aggressive long unwinding along with short build-up if 59,200 gets breached.

Key Resistance: 59,200, 60,000

Key Support: 58,300, 57,400

Strategy: Sell Bank Nifty Futures below/around 59,600, with a stop-loss of 60,000, targeting 58,800.

Jay Thakkar, Head of Derivatives and Quant Research and Vice President at ICICI Securities

The banking index, too, closed significantly lower in the last trading session. After opening with a gap down, it managed to recover but failed to close above the 60,000 level, indicating bearishness in the near term. Going forward, until it closes back above 60,000 levels, the short-term trend remains negative, whereas support on the lower side is now at 58,000 levels.

Private sector banks are exerting more pressure on the index overall, and until there is a reversal there, this index is unlikely to bounce back.

Key Resistance: 60,000, 61,000

Key Support: 58,900, 58,000

Strategy: Sell Bank Nifty Futures on a rise near 60,500, with a stop-loss of 61,000, targeting 59,000 and 58,000.