Trading Plan: Can bulls help Nifty 50 reclaim 26,200, Bank Nifty hit the 60,000 zone?

NIfty Trading Plan for January 1

• The trendline breakout has boosted confidence among Bank Nifty bulls, as the index is likely to march toward the 60,000 zone soon, with 59,200–59,000 acting as immediate support, experts said.

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The Nifty 50 and Bank Nifty were back in momentum, trading well above their short-term moving averages. Considering the bullish bias, the Nifty 50 is expected to attempt to reclaim 26,200, but the sustainability of the move is the key factor to watch thereafter. Holding above this level can open the door for a record high, while immediate key support is placed at 26,000. Meanwhile, the trendline breakout has boosted confidence among Bank Nifty bulls, as the index is likely to march toward the 60,000 zone soon, with 59,200–59,000 acting as immediate support, experts said.

On December 31, the Nifty 50 jumped 191 points (0.74 percent) to 26,130, while the Bank Nifty rallied 411 points (0.69 percent) to 59,582. Bulls also supported market breadth, as about 2,040 shares saw buying interest compared to 841 declining shares on the NSE.

Nifty Outlook and Strategy

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities

In December, the benchmark index Nifty traded within a narrow band of 633 points, marking its tightest monthly range since August 2023. Throughout the period, the index failed to establish a clear directional move, remaining largely sideways with subdued trending strength.

However, on the last trading session of the month, the index witnessed bullish momentum and ended the month on a flat note. Currently, it is trading above its crucial moving averages. The daily RSI has been trading in a sideways zone for the last 16 trading sessions. The MACD histogram is also exhibiting a flat structure, reinforcing the absence of directional momentum. Meanwhile, the ADX, a key gauge of trend strength, is currently quoting at 10.88, its lowest reading since June 2024, further highlighting the extremely weak trend environment prevailing in the market.

Tracking historical seasonality trends reveals that the January series has generally been a weak month for the Nifty over the past 18 years. During this period, the index has ended the month in positive territory on only six occasions, with an average gain of 5.67 percent, reflecting instances of strong upward momentum when the month did turn positive. However, on 12 occasions, the Nifty has closed lower, registering an average decline of 4.57 percent, underscoring a statistically negative bias for January and suggesting that the month has more often been associated with profit-taking and subdued sentiment. The average return for the Nifty in the January series has been -1.16 percent. Over the past 18 years, January has consistently shown an average volatility of 8.90 percent for the Nifty index.

Going ahead, for the short term, the zone of 25,900–25,850 will act as important support for the index. Any sustainable move below 25,850 will lead to further correction up to the 25,650 level. On the upside, the zone of 26,200–26,250 will act as an immediate hurdle for the index. Any sustainable move above 26,250 will lead to the resumption of its northward journey. In that case, it is likely to test 26,400, followed by 26,550 in the short term.

Key Resistance: 26,200, 26,250, 26,400

Key Support: 25,900, 25,850, 25,650

Strategy: Buy Nifty Futures at a CMP of around 26,240–26,300, with a stop-loss of 26,180, targeting 26,490.

Arun Kumar Mantri, Founder of Mantri FinMart

The Nifty has shown excellent momentum from the key short-term 20-DMA, with a strong reversal candle on the daily charts. The trend of the index has turned bullish, with key support placed around 26,000–25,900, while 26,220–26,250 remains a strong supply zone.

The view remains bullish for the short term as long as the index respects the 20-DMA and the support zones.

Key Resistance: 26,220, 26,250

Key Support: 25,900, 25,980

Strategy: Aggressive traders may buy Nifty Futures on any minor pullbacks toward the 26,000 level, keeping a strict stop-loss placed below 25,900 on a closing basis, for targets of 26,250.

Rupak De, Senior Technical Analyst at LKP Securities

On the daily chart, a doji formation in the previous session followed by a sharp rise on Wednesday, reflected through a visible green candle, signals the possibility of more gains ahead. Additionally, the Nifty 50 has reclaimed the 21 EMA after reversing from a brief dull phase.

Although the trend is not decisively bullish yet—unlike the Bank Nifty, which has given a clear breakout—the current recovery may continue in the near term. On the upside, the index could move toward 26,315, while 26,100 may act as the initial support.

Key Resistance: 26,240, 26,315

Key Support: 26,100, 26,000

Strategy: Buy Nifty 26,200 Call of January 6 expiry at Rs 85, with a stop-loss of Rs 59, targeting Rs 130.

Bank Nifty - Outlook and Positioning

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities

The banking benchmark index, Bank Nifty, also traded in a relatively narrow range through the month of December, mirroring the broader market’s consolidative behaviour. It traded within a narrow range of 1,401 points in December, which was the lowest monthly range since April 2019. Throughout the month, the index moved within a falling channel, reflecting a controlled downward drift within a well-defined structure.

Despite the restricted range and channel-bound movement, the primary trend for Bank Nifty remains bullish, as the index continues to trade above its key short-term and long-term moving averages. On Wednesday, the index gave a falling channel breakout, which is a bullish sign.

Going ahead, the zone of 59,100–59,000 will act as important support for the index. As long as the index trades above the 59,000 mark, it is likely to continue its upward journey and test 60,000, followed by 60,500 in the short term.

Key Resistance: 60,000, 60,500

Key Support: 59,100, 59,000

Strategy: Buy Bank Nifty Futures at a CMP of around 59,800–59,900, with a stop-loss of 59,600, targeting 60,700.

Arun Kumar Mantri, Founder of Mantri FinMart

Bank Nifty was again the star performer on Wednesday, thanks to aggressive short covering in index heavyweights such as SBI, Kotak Mahindra Bank, and Axis Bank. The index showed initial signs of strength in Tuesday’s trade and carried strong momentum to close above the 59,500 mark, where significant call writing is witnessed in the new series. The price trend remains bullish, with support placed around 59,200–59,250, while 59,900 remains the next short-term hurdle.

Key Resistance: 59,900, 60,000

Key Support: 59,200, 59,250

Strategy: Short-term traders may opt to buy Bank Nifty Futures around 59,300–59,320, keeping a stop-loss below 59,100 on spot levels for upside targets of 59,900–60,000.

Rupak De, Senior Technical Analyst at LKP Securities

A downward consolidation has ended with an upward breakout, as is often observed. The breakout appears convincing, supported by a sharp upmove after a few days of a lull phase. Additionally, the banking index has closed above the 21 EMA for the last two sessions, suggesting a positive trend.

The RSI has also delivered a falling channel breakout. In the short term, the trend is likely to remain positive, with potential upside toward 60,500. On the downside, support is placed at 59,200; a break below this level could weaken the trend.

Key Resistance: 60,000, 60,500

Key Support: 59,200

Strategy: Buy Bank Nifty January 60,000 Call at Rs 575, with a stop-loss of Rs 500, targeting Rs 700.