Trading Plan: Can Nifty 50, Bank Nifty extend their northward momentum after GST slab rationalisation?

Nifty Trading Plan for September 4

The Nifty 50 and Bank Nifty rebounded smartly, reclaiming 24,700 and 54,000 on a closing basis on Wednesday. With the GST slab rationalisation announced, if the Nifty 50 sustains above 24,750, a gradual rally toward the 24,800–25,000 levels is possible going ahead, whereas 24,500 is expected to be immediate support, followed by 24,400 as key support. Meanwhile, the Bank Nifty needs to stay above 54,200 for a further upmove toward 54,400–55,000, followed by 55,400 (50-day EMA); however, 53,582 (200 DEMA) is expected to be key support, as a move below it could lead to 53,400, experts said.

On September 3, the Nifty 50 advanced 135 points to close at 24,715, while the Bank Nifty soared 407 points to 54,068, with healthy market breadth. A total of 1,884 shares saw buying interest against 894 declining shares on the NSE.

Nifty Outlook and Strategy

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

The benchmark index Nifty staged a strong recovery, rallying over 300 points from the low of 24,404 in three trading sessions. This rebound, however, has not been without turbulence. The last two trading sessions have seen elevated volatility, indicating indecision among market participants. While the pullback suggests buying interest at lower levels, the choppiness reflects caution ahead of the key GST meeting.

On Wednesday, the benchmark index Nifty managed to close above its 100-day EMA. Further, the daily RSI has rebounded from the recent low of 40 and is now on the verge of delivering a bullish crossover.

Going ahead, the 50-day EMA zone of 24,770–24,800 will act as a crucial hurdle for the index. Any sustainable move above the level of 24,800 will lead to an extension of the pullback rally up to the psychological 25,000 mark. On the downside, the zone of 24,530–24,500 will act as immediate support for the index. Any sustainable move below the level of 24,500 will lead to a resumption of its southward journey.

Key Resistance: 24,800, 25,000

Key Support: 24,500

Strategy: Buy Nifty Futures at around 24,760–24,830, with a stop-loss of 24,700, targeting 25,030.

Nilesh Jain, Head- Equity Technical & Derivative Research at Centrum Broking

The markets saw a sharp rebound, with Nifty Futures crossing the 24,800 mark and reclaiming both the 21-day and 100-day moving averages. However, the immediate resistance remains at the recent swing high of 24,875, and a breakout above this level could open the door for a move towards 25,000. Despite the bounce, the broader trend structure remains indecisive, with a sell crossover visible on the weekly chart, indicating caution at higher levels.

Key Resistance: 24,875, 25,000

Key Support: 24,650, 24,580

Strategy: Buy Nifty Futures above 24,875, with a stop-loss of 24,750, targeting 25,000/25,100.

Rupak De, Senior Technical Analyst at LKP Securities

The Nifty rebounded after holding above 24,500, climbing towards 24,750. However, it faced initial resistance near the 200-hourly moving average. Despite the recovery, the broader trend remains bearish, as the index continues to trade below the 21 EMA on the daily chart. A clear breakout above 24,750 could spark a stronger uptrend, with the potential to push the Nifty towards 25,000. On the downside, support lies at 24,650, and a drop below this level could drag the index back to 24,500.

Key Resistance: 24,750, 25,000

Key Support: 24,650, 24,500

Strategy: Buy Nifty September 9, 24,800 strike Call above Rs 90, with a stop-loss of Rs 60, targeting Rs 140.

Bank Nifty - Outlook and Positioning

Nilesh Jain, Head- Equity Technical & Derivative Research at Centrum Broking

Bank Nifty staged a strong rebound and outperformed the Nifty index, forming a bullish candle on the daily chart. After the recent sharp decline, this recovery appears to be a retracement, with potential for further upside in the coming sessions. A decisive move above 54,500 in Futures could trigger short-covering, propelling the index towards the 55,000–55,500 zone. Additionally, a bullish crossover on the hourly MACD signals the likelihood of a follow-through move in the coming session.

Key Resistance: 54,500, 55,100

Key Support: 53,950, 53,700

Strategy: Buy Bank Nifty Futures above 54,500, with a stop-loss of 54,200, targeting 55,000.

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

Over the last four trading sessions, Bank Nifty has been oscillating within a narrow range of 600 points, suggesting a phase of consolidation. What’s noteworthy is that this consolidation is occurring around its 200-day EMA— a key long-term support zone. The index appears to be forming a strong base at this level, which could potentially act as a launchpad for a directional move once volatility resumes.

Going ahead, the 200-day EMA zone of 53,600–53,500 will act as important support for the index. On the upside, the zone of 54,200–54,300 will act as a crucial hurdle for the index. A sustainable move on either side will lead to a trending move in the index.

Key Resistance: 54,200, 54,300

Key Support: 53,600, 53,500

Strategy: Buy Bank Nifty Futures at around 54,330–54,430, with a stop-loss of 54,000, targeting 54,850–54,950.

Rupak De, Senior Technical Analyst at LKP Securities

The Bank Nifty has formed a bullish engulfing pattern after a period of decline and consolidation, indicating a potential short-term recovery. In the near term, 53,500 is expected to act as a crucial support level. As long as this level holds, the index may move higher towards 54,600. Additionally, the RSI is emerging from the oversold zone, which further supports a positive outlook.

Key Resistance: 54,600, 55,000

Key Support: 54,000, 53,500

Strategy: Buy Bank Nifty September 54,600 strike Call above Rs 550, with a stop-loss of Rs 480, targeting Rs 720.

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.