Trading Plan: Can Nifty 50, Bank Nifty extend Monday's relief rally?

Nifty Trading Plan for August 12

The Nifty 50 staged a relief rally after hitting a 3-month low, climbing above the midline of the Bollinger Bands and the 20-week EMA, but follow-through and sustained buying are crucial for the continuation of the upward trend. The index needs to clear and sustain above the 24,700–24,750 zone to confirm a northward journey. Until then, consolidation may continue with support around the 24,350 zone. Meanwhile, the Bank Nifty also rebounded sharply and consistently defended the 100-day EMA (54,900–54,950 zone), which may act as near-term support. However, a decisive break above the 56,000 zone is needed to fuel further rally, according to experts.

On August 11, the Nifty 50 soared 222 points (0.91%) to 24,585, while the Bank Nifty jumped 506 points (0.92%) to 55,511. The market breadth turned positive but was not particularly strong — a total of 1,479 shares advanced, while 1,255 shares declined on the NSE.

Nifty Outlook and Strategy

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

The Nifty bounced back sharply after forming a double bottom on the daily chart. According to Options data, the Put-Call Ratio (PCR) had fallen to 0.48, an unusually low and oversold level, especially for a Friday or early Monday. Historically, such levels often precede a market bounce. The double bottom pattern, coupled with the oversold PCR reading, triggered short covering in the index.

As of Friday, the FII net long percentage was approximately 8.3%, a historically low reading previously seen in March 2023 and March 2025, both of which were followed by rebounds.

Currently, the index has been shifting its highs lower. A sustained move above 24,700 will confirm a trend reversal. On the downside, 24,300 now acts as a critical support level. As long as this holds, the short-term trend remains sideways to positive, with potential for a bounce-back.

However, Implied Volatility (IV) is still quite low at 10.73, with IVP at 8.40 and IVR at 11.27. A rise in IV could stall the rally or even trigger a correction. Until then, the market may continue its bounce.

Key Resistance: 24,600, 24,800, 25,000

Key Support: 24,300, 24,000

Strategy: Buy at CMP of 24,585 and on dips near 24,500, with a stop-loss of 24,300, targeting 24,800 and 25,000.

Mehul Kothari, Senior Technical Analyst at Anand Rathi

Technically, an interesting pattern has emerged on the daily chart — for the past three sessions, the Nifty has formed nearly identical lows in the 24,330–24,350 zone, suggesting a strong base formation. On the hourly chart, the RSI has developed a bullish divergence, indicating potential upside.

Adding to the bullish case, the long-short ratio stood at just 8% as of August 8, implying room for short-covering to further fuel the rally. Collectively, these signals suggest a positive near-term outlook.

Key Resistance: 24,700, 24,800

Key Support: 24,300, 24,200

Strategy: Buy Nifty Futures in the 24,600-24,550 zone, with a stop-loss of 24,300, targeting 25,000.

Shitij Gandhi, Senior Research Analyst (Technicals) at SMC Global Securities

The Nifty regained strength, moving back above the 24,500 mark as investors responded positively to the anticipated US–Russia Summit this week. Technically, the index has also closed above its 20-DEMA on the weekly chart, signaling potential continuation towards the 24,750 level.
Key support remains at 24,450. As long as the index sustains above this level, bullish momentum is expected to persist.

Key Resistance: 24,700, 24,800

Key Support: 24,500, 24,400

Strategy: Buy Nifty Futures on dips near 24,550, with a stop-loss below 24,400, targeting 24,800.

Bank Nifty - Outlook and Positioning

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

The Bank Nifty has rebounded sharply from recent lows of 54,905, managing to close above 55,000. As long as it holds this level on a closing basis, a further bounce-back on the back of short covering is likely. There was heavy Call unwinding, although Put additions were not as significant as in Nifty, keeping the PCR below 0.74. The 55,500 level is decisive. A close above it may take the index to 56,000–56,500, while a break below 55,000 could trigger a decline towards 54,000–53,800.

Key Resistance: 56,000, 56,500

Key Support: 55,000

Strategy: Buy above 55,500, with a stop-loss of 54,900, targeting 56,000 and 56,500.

Mehul Kothari, Senior Technical Analyst at Anand Rathi

Technically, the past three sessions have created identical lows in the 54,900–55,000 zone, forming a solid base. A positive divergence in the hourly RSI indicates a possible shift in momentum. With this foundation, the bias tilts upward, provided buying interest persists.

Key Resistance: 55,800, 56,000

Key Support: 54,900, 54,700

Strategy: Buy Bank Nifty Futures in the 55,400-55,500 zone, with a stop-loss of 54,900, targeting 56,300.

Shitij Gandhi, Senior Research Analyst (Technicals) at SMC Global Securities

Last week, banking stocks followed the broader market weakness, with Bank Nifty falling below the 55,500 mark. However, this week, bulls regained control as the index found support at its 20-DEMA on the weekly chart and rallied strongly. Public sector banks led the recovery, with the Nifty PSU Bank Index offering strong support.

Momentum now looks poised to extend towards the 56,200 level, while 55,000 remains key support.

Key Resistance: 55,900, 56,200

Key Support: 55,200, 55,000

Strategy: Buy Bank Nifty on dips near 55,250, with a stop-loss below 54,800, targeting 55,900.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.