Trading Plan: Can Nifty 50 break its 4-day losing streak, Bank Nifty scale above 59,300?

Nifty Trading Plan for December 31

• Reclaiming and sustaining above 59,200 can give strength to Bank Nifty for a move toward 59,300–59,500; however, support is placed at the 58,800–58,700 zone.

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The recovery from the day’s low (which also coincided with a support trendline) and the formation of a Doji pattern after a fall on December 30 raised hopes for a rebound and an end to the four-day losing streak in the upcoming session. For that, the Nifty 50 needs to scale above 26,000, as above it, 26,100–26,200 are the levels to watch. However, sustaining below this level can keep the Nifty 50 in a consolidative mode, with support at 25,900–25,800, experts said. Meanwhile, reclaiming and sustaining above 59,200 can give strength to Bank Nifty for a move toward 59,300–59,500; however, support is placed at the 58,800–58,700 zone.

On December 30, the Nifty 50 fell 3 points to 25,939, while the Bank Nifty rose 239 points to 59,171. Market breadth was dominated by bears, with about 1,661 shares declining compared to 1,198 advancing shares on the NSE.

Nifty Outlook and Strategy

Vinay Rajani, Senior Technical Research Analyst at HDFC Securities

Nifty extended its losing streak to a fourth straight session. The expiry-day trade was marked by heightened volatility—bears dominated the first half, while bulls staged a smart recovery in the latter part of the session.

Despite the minor decline, Nifty’s close above the 50-DEMA (25,837) keeps the short-term bullish structure intact. A decisive close below this level could signal a breakdown of the ongoing positional uptrend. On the upside, sustained trade above the 26,100–26,150 zone would likely rekindle bullish momentum and open the path for higher levels. Above 26,150, Nifty could extend its rise toward fresh all-time highs above 26,330 and beyond.

Key Resistance: 26,150, 26,330

Key Support: 25,837, 25,726

Strategy: Buy Nifty Futures at around 25,938, with a stop-loss of 25,726, targeting 26,300.

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

In recent sessions, Nifty has entered a sideways phase. On the daily chart, the index is currently trading below the middle Bollinger Bands, keeping short-term pressure intact. From a daily candlestick perspective, the index is yet to register a close above the prior day’s high. The formation of a Doji candle suggests indecision in the market. For a short-term reversal on the upside, acceptance back above 26,030 will be important. Until such a move is seen, the upside remains restricted.

On the downside, any breach below 25,880 can result in the continuation of drifting or range-bound behaviour in the near term.

The Nifty is likely to trade within a range of 25,880–26,030. Unless we see a range breakout, a buy-near-support and sell-near-resistance strategy within the range remains prudent.

Key Resistance: 26,200

Key Support: 25,880

Strategy: Long positions can be created above 26,030 with upside targets of 26,130 followed by 26,200, with a stop-loss at 25,930 levels.

Preeti K Chabra, Founder of Trade Delta

On the daily chart, Nifty continues to trade within a downward-sloping channel, maintaining a lower high–lower low structure, which reflects persistent selling pressure in the short term.

Nifty closed near the 38.2% Fibonacci retracement level at 25,941, derived from the rally between the November 7 low of 25,318 and the December 1 high of 26,325, making this zone technically significant. On the upside, the 20-day SMA (middle Bollinger Band) at 25,982 is acting as immediate resistance, and a sustained move above this level is required to negate the short-term weakness.

On the downside, 25,896, aligned with the 40-day EMA, serves as an immediate support area. A decisive break below this level could intensify selling pressure and open the door for further correction.

Momentum indicators suggest caution, as the daily RSI at 48.9 remains below its signal line, indicating mild bearish momentum; however, the flattening RSI also hints at a potential slowdown in downside momentum.

From a derivatives standpoint, weekly options data remains neutral, offering no clear directional cues.

Key Resistance: 25,982, 26,088

Key Support: 25,896, 25822

Strategy: Consider selling Nifty Futures near 25,982, for a target of 25,896 followed by 25,822, with a stop-loss of 26,088.

Bank Nifty - Outlook and Positioning

Vinay Rajani, Senior Technical Research Analyst at HDFC Securities

After four sessions of corrective decline, the Bank Nifty index regained momentum on Tuesday, outperforming the Nifty 50. The index has formed a higher bottom above 58,712 and rebounded strongly, reaffirming the continuation of the ongoing uptrend.

A move above the 59,500 mark would signal a fresh breakout and likely reintroduce strong bullish momentum. The index is currently trading above both its 20-DEMA and 50-DEMA, underscoring a bullish setup across multiple timeframes. Additionally, the formation of a bullish Engulfing pattern on the daily chart further strengthens the case for a potential upside reversal.

Key Resistance: 59,500, 60,115

Key Support: 58,700, 58,380

Strategy: Buy Bank Nifty Futures at around 59,250, with a stop-loss of 58,700, targeting 60,100.

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

Bank Nifty, in the previous session, found strong support near the 58,700 zone, which is a level we have mentioned in the past. From this support, Bank Nifty witnessed a sharp rebound of nearly 400 points, reflecting strong buying interest at lower levels. By the end of the session, Bank Nifty gave a close above the prior day’s high for the first time after four days of decline, which is a sign of improving momentum.

PSU banks emerged as the key contributors to this rebound, while private banks continued to show relative underperformance. Further follow-up action is now required to confirm the short-term trend change, which can push the index toward 59,470, coinciding with the prior swing high.

Bank Nifty is at an important juncture. The next few sessions of price action will be crucial in determining the bigger direction. Acceptance above 59,280 may extend the pullback, while a break below 58,700 could open doors for fresh selling opportunities.

Key Resistance: 59,800

Key Support: 58,700

Strategy: Long positions can be created above 59,280 with a stop-loss of 58,990 and targets of 59,570 followed by 59,800 levels.

Preeti K Chabra, Founder of Trade Delta

Bank Nifty formed a bullish candle on the daily chart, taking support near 58,755, which coincides with the 40-day EMA, indicating buying interest at lower levels. The index also managed to close above the 38.2% Fibonacci retracement level at 58,984, calculated from the rally between the November 7 low of 57,157 and the December 1 high of 60,114, reinforcing the near-term support base.

On the upside, the 23.6% Fibonacci retracement level at 59,416 is acting as a key resistance zone, and a sustained breakout above this level could open the door for further upside.

Momentum indicators support the positive bias, as the daily RSI at 53.25 is trading slightly above its signal line, suggesting gradually improving bullish momentum.

Overall, Bank Nifty appears to be staging a bounce from support, and a buy-on-dips strategy can be adopted as long as the index holds above the immediate support zone (58,984). A decisive breakdown below this area would, however, negate the positive outlook.

Key Resistance: 59,416, 59,550

Key Support: 58,984, 58,755

Strategy: Buy Bank Nifty Futures near the cash reference level of 58,984 for an upside target of 59,416 followed by 59,550, while maintaining a stop-loss at 58,755.