Trading Plan: Can Nifty 50, Bank Nifty see follow-up buying?

Nifty Trading Plan for September 02

The Nifty 50 and Bank Nifty rebounded on Monday after witnessing a sharp correction in the previous week, led by short-covering, though overall sentiment remains bearish. The Nifty 50 is expected to face a hurdle at 24,700–24,800, as sustaining above it can drive the index toward 25,000; however, 24,400–24,350 is expected to be a crucial support zone. Meanwhile, the Bank Nifty needs to hold 54,000 for an upward move toward 54,500–55,000; however, 53,600–53,500 can act as a support zone, according to experts.

On September 1, the Nifty 50 rallied 198 points (0.81 percent) to 24,625, while the Bank Nifty climbed 347 points (0.65 percent) to 54,002, with healthy market breadth. A total of 1,945 shares saw buying interest compared to 862 declining shares on the NSE.

Nifty Outlook and Strategy

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

Nifty closed in positive territory in the last trading session on account of short-covering after the positive GDP numbers. Now, on the lower side, 24,400 is an immediate support, whereas on the upside, the first hurdle is at 24,800 followed by 25,000 and thereafter 25,200 levels. The Nifty Auto index continues to remain the strongest sector, whereas the Nifty Bank continues to underperform, which is weighing on the index. The FII index long % is still oversold as it is at approximately 9%; however, the PCR has jumped above 1 to 1.13, which is positive in the near term. So, on the weekly expiry day, the index is likely to trade within a range of 24,800 to 24,500 levels.

Key Resistance: 24,800

Key Support: 24,500

Strategy: Buy Nifty Futures on dips near 24,550, with a stop-loss of 24,475, targeting 24,700 and 24,800.

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

From a technical perspective, Nifty has displayed bullish divergence on both the MACD and RSI hourly charts. The index once again rebounded from the key demand zone near 24,400, while trendline support on the daily scale is visible around 24,350. Further strengthening the bullish outlook, the long-short ratio is indicating ample scope for short-covering to fuel the rally.

Key Resistance: 24,800, 25,000

Key Support: 24,500, 24,400

Strategy: Buy Nifty Futures in the 24,750–24,650 zone, with a stop-loss of 24,550, targeting 25,000.

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

On the charts, the Nifty 50 is currently stuck in a range between 24,500 and 24,850, and a clear breakout on either side will set the tone for the near-term directional move. For now, the bias stays with the bears as long as the index trades below 24,850 (spot basis). Adding to the caution is the historically weak seasonality for September, which often weighs on market sentiment. Overall, volatility is expected to stay high, with the next decisive move hinging on whether bulls can push past 24,850 or if bears manage to drag the index back under 24,500.

Key Resistance: 24,850, 25,000

Key Support: 24,600, 24,500

Strategy: Sell Nifty Futures on rallies near 24,850, with a stop-loss above 25,000, targeting 24,600.

Bank Nifty - Outlook and Positioning

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

Bank Nifty Futures has closed above the 54,000 level, and as long as that level is held, the probability of short-covering is high, which can help the index bounce back to the 54,500–55,000 levels. The 54,000 strike has the highest Put base for the month, and the PCR has jumped to 0.89 levels, thus bouncing back from an oversold territory. The immediate range for Bank Nifty Futures is 55,000 to 54,000.

Key Resistance: 54,500, 55,000

Key Support: 53,800, 53,500

Strategy: Buy Bank Nifty Futures at CMP, with a stop-loss of 53,800, targeting 54,500 and 55,000.

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

From a technical perspective, the Bank Nifty remains below the 20–30 DEMA, which calls for caution. Notably, on August 29, the index formed a long-legged Doji, mirroring the candlestick pattern seen on May 9, which preceded a strong bullish phase. Adding to the positive setup, bullish divergence is visible on both the MACD and RSI hourly charts, hinting at renewed upside momentum in the near term. Overall, the signals suggest a constructive outlook for Bank Nifty in the coming sessions.

Key Resistance: 54,500, 54,800

Key Support: 53,500, 53,300

Strategy: Buy Bank Nifty Futures in the 54,400–54,200 zone, with a stop-loss of 53,800, targeting 55,200.

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

On the technical front, the Bank Nifty index is hovering close to a key support zone of 53,500–53,000, with resistance capped at 54,500–54,800. Daily charts show a pattern of lower highs, highlighting fragile sentiment. A clear break below 53,500 could pave the way for a deeper fall toward 52,500, while a recovery above 54,500 may spark short-covering and lift the index back to 55,000.

The overall bias, however, remains negative as private banks are struggling and strength hasn’t been enough to turn the tide. For now, the near-term outlook for Bank Nifty remains vulnerable, and traders are advised to stay cautious until a decisive trend emerges.

Key Resistance: 54,500, 54,800

Key Support: 54,000, 53,500

Strategy: Sell Bank Nifty on rallies near 54,600, with a stop-loss above 55,000, targeting 54,000.

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.