Trading Plan: Can Nifty 50 break 25,450, Bank Nifty slip below 20 DEMA support?

Nifty Trading Plan for November 7

The Nifty 50 fell below short-term moving averages with weakening momentum and technical indicators, though it held above medium- and long-term moving averages. If the benchmark index breaks its 25,450 support, a fall toward 25,350–25,300 is possible. However, in case of a rebound, 25,700–25,800 are the levels to watch. Meanwhile, the failure to defend the 57,500–57,400 zone (where it converged with the midline of the Bollinger Bands, the 20-day EMA, and the 23.6% Fibonacci retracement of the recent sharp rally) can widen selling pressure in the Bank Nifty toward 57,000. On the higher side, however, the index may find resistance at 57,800–58,000 levels, experts said.

On November 6, the Nifty 50 corrected 88 points to 25,510, while the Bank Nifty slipped 273 points to 57,554. Market breadth remained in favour of bears, as a total of 2,163 shares declined against 684 advancing shares on the NSE.

Nifty Outlook and Strategy

Dhupesh Dhameja, Derivative Research Analyst at Samco Securities

The Nifty index remains under sustained pressure, struggling to surpass the 25,800–25,900 resistance zone, which has turned into a firm supply area.

Despite brief rebounds, every rise has drawn renewed selling, underscoring the dominance of bears. The index’s consistent lower-high, lower-low formation, coupled with a close below its 20-DEMA and 0.382 Fibonacci retracement, signals a weakening structure.

In the derivatives segment, a significant open interest buildup at the 26,000 Call strike against limited Put additions near 25,000 highlights strong resistance at higher levels. With RSI slipping below 50, momentum remains weak; hence, until Nifty decisively breaks above 25,800, a sell-on-rise strategy stays favourable.

Key Resistance: 25,700, 25,850, 26,000

Key Support: 25,500, 25,350, 25,200

Strategy: Traders may consider the Bear Call Spread strategy for the November 11 expiry by selling one lot of 25,350 CE at Rs 240 and buying one lot of 25,550 CE at Rs 106. This setup is designed to capitalize on potential downside momentum.

Stop-Loss: Hold the strategy until expiry, with the maximum Mark-to-Market (MTM) loss capped at Rs 4,935.

Target: Hold the strategy until expiry to achieve a maximum profit of Rs 10,065, or consider booking profits once MTM gains exceed Rs 5,500.

Jay Mehta, Technical Research at JM Financial Services

Nifty has developed a short-term bearish top, showing exhaustion with negative momentum divergence. Last Tuesday, it closed below the key 25,700 support. The price is below the 10- and 20-day EMAs but above medium- and long-term averages, and the medium-term structure is still bullish. The latest close matches the 38.2% retracement of recent rallies. Strong support lies at 25,400; a break below could target 25,320–25,345, where the 50-day EMA offers backing.

RSI hovers just above 50, with a weakening MACD signaling fading bullish strength. The prior week’s Gravestone Doji on the weekly chart adds bearish pressure, requiring a close above its high to invalidate.

Key Resistance: 25,800, 25,900, 26,100

Key Support: 25,400, 25,320, 25,160

Strategy: Buy on dips near 25,400 and 25,320–25,345, with a stop-loss at 25,160; or take a conservative approach by entering longs on a breakout above 25,900, adding more longs above 26,100.

Hardik Matalia, Derivative Analyst at Choice Broking

On the daily chart, Nifty formed a strong bearish-bodied candle with an upper wick, indicating selling pressure from higher levels. The index has now retraced close to the 0.618 Fibonacci retracement level near 25,460, while the next major support lies around 25,370, which aligns with the 0.705 retracement zone.

Going forward, immediate support is placed at 25,460, followed by 25,370. A sustained move below these levels could trigger further downside pressure toward the 25,200–25,050 range in the near term. On the upside, resistance is seen around 25,600, followed by 25,800. As long as the index trades below 25,800, a “sell-on-rise” strategy is advisable. Traders should maintain a strict stop-loss and remain cautious until a clear reversal signal emerges.

Key Resistance: 25,600, 25,800

Key Support: 25,460, 25,370

Strategy: Sell Nifty Futures on a rise near the 25,700 level for a target of 25,200–25,050, with a stop-loss of 25,800 on a closing basis.

Bank Nifty - Outlook and Positioning

Dhupesh Dhameja, Derivative Research Analyst at Samco Securities

The Nifty Bank index is witnessing a clear loss of upward momentum, as profit booking near crucial support levels and repeated rejections from higher zones signal a weakening structure. Despite multiple rebound attempts, the index has failed to close above the previous day’s high for five straight sessions, reinforcing strong resistance around 58,200–58,300.

Persistent Call writing at 58,500 highlights bearish dominance, while Put writers shifting lower reflects rising caution. With the index trading below its 10-DEMA and momentum indicators softening, sentiment remains fragile. Unless the index decisively reclaims 58,300, a sell-on-rise strategy remains the most prudent approach.

Key Resistance: 58,000, 58,300, 58,500

Key Support: 57,500, 57,200, 57,000

Strategy: Traders can consider selling Nifty Bank November Futures if the price crosses below 57,850–57,900, setting a stop-loss above 58,100. Profit-taking can be considered once the index reaches 57,550–57,450.

Jay Mehta, Technical Research at JM Financial Services

Bank Nifty shows a short-term bearish top with exhaustion and negative momentum divergence, breaking down from a triangular consolidation. The latest close aligns with the 23.6% retracement of recent rallies. A decisive breach of 57,480 could extend declines to 57,400, 56,950, and 56,800. Declining RSI and weakening MACD highlight diminishing bullish momentum. Bank Nifty remains relatively stronger than Nifty, trading above all key EMAs, and the medium-term structure is still bullish. Last week’s negative spinning top on the weekly chart is bearish, requiring a close above its high to negate.

Key Resistance: 58,000, 58,300, 58,580

Key Support: 57,480, 57,400, 56,950, 56,800

Strategy: Buy Bank Nifty Futures on dips near 57,400, 56,950, and 56,800, with a stop-loss at 56,480; or take a conservative approach by going long on a breakout above 58,300, adding more longs above 58,580.

Hardik Matalia, Derivative Analyst at Choice Broking

On the daily chart, the Bank Nifty index formed a bearish-bodied candle with a long upper wick, indicating strong selling pressure from higher levels. Over the past two weeks, the index has been trading within a broad range of nearly 1,000 points, reflecting indecision and consolidation at higher zones.

On the downside, immediate support is placed near 57,450, followed by 57,200. A breakdown below these levels could trigger extended selling pressure toward the 57,000–56,800 range. On the upside, resistance is seen around 57,700, followed by the 58,000–58,200 zone. As long as the index trades below these resistance levels, a “sell-on-rise” strategy remains advisable. Traders should maintain strict stop-loss levels and stay cautious until a clear breakout is witnessed on either side of the range.

Key Resistance: 57,700, 58,200

Key Support: 57,200, 57,000

Strategy: Sell Bank Nifty Futures on a rise near the 58,000 level for a target of 57,000–56,800, with a stop-loss of 58,200 on a closing basis.

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.