The Nifty 50 and Bank Nifty managed to eke out marginal gains despite significant profit booking from higher levels on September 5. As long as the Nifty 50 holds 24,700, the upmove toward 24,800 (50-day EMA), followed by 25,000 (trendline resistance), can be possible. However, below it, the 24,500–24,450 zone can act as support. Meanwhile, the technical and momentum indicators still show nervousness and consolidation in the Bank Nifty. If the banking index holds 54,000 support, the upward journey toward 54,800–55,000, followed by 55,350 (50 DEMA), is possible. But if it sustains below 54,000, the 200-day EMA (53,587) can act as support, experts said.
On September 4, the Nifty 50 rose 19 points to 24,734, while the Bank Nifty gained 8 points to 54,075, but the market breadth was weak. About 1,743 shares saw correction compared to 1,043 advancing shares on the NSE.
Nifty Outlook and Strategy
Dhupesh Dhameja, Derivative Research Analyst at Samco Securities
Nifty gave up most of its early gains from a GST-led gap-up, ending with a bearish Marubozu candle that signals caution. The index has been trapped within 24,500–25,000 for several sessions, with buyers and sellers alternating control. Strong Call writing at 25,000 caps the upside, while robust Put positions at 24,500 anchor support. Every attempt to rally is meeting with profit booking, reflecting weak follow-through buying.
Until the index breaks above 24,900 or below 24,400, no clear trend will emerge. High volatility and sharp intraday swings are expected, making oscillating “range-trading” strategies best suited to the current setup.
Key Resistance: 24,850, 25,000, 25,150
Key Support: 24,700, 24,600, 24,500
Strategy: Traders may consider a Short Strangle strategy for the September 9 expiry by selling one lot of 24,800 CE at Rs 78 and selling one lot of 24,700 PE at Rs 73. This setup is designed to capitalize on potential range-bound momentum.
Stop-Loss: Hold the strategy until expiry with the maximum Mark-to-Market (MTM) loss capped at Rs 6,800.
Target: Hold the strategy until expiry to achieve a maximum profit of Rs 11,381, or consider booking profits once the MTM gains exceed Rs 7,000.
Jay Mehta, Technical Research at JM Financial Services
The last session formed a Bearish Belt-Hold pattern with heavy selling at higher levels. The daily structure is fragile, with the price above the 100- and 200-day EMAs but below the 20- and 50-day EMAs, with mostly flat-to-mildly negative EMA slopes. Resistance stands at 24,850 and 25,160, tied to the 61.8% Fibonacci retracement of recent corrections. Daily RSI and MACD are neutral-to-slightly bearish, while weekly momentum is weakening.
The market is likely to trade sideways to mildly bearish between 24,280 (200-day EMA) and 25,160, with the weekly RSI at 50 and price above the 200-day EMA as the only positive signals.
Key Resistance: 24,850, 25,160
Key Support: 24,600, 24,400, 24,280
Strategy: Trade within the range of 24,280–24,300 support and 25,070–25,160 resistance, and watch for decisive breakouts or breakdowns on either side.
Mandar Bhojane, Senior Technical & Derivate Analyst at Choice Broking
Nifty continues to trade in a sideways band between 24,350 and 25,000, with volatility expected inside this range. A sustained close above the 25,000 mark will be a key trigger for fresh momentum, potentially opening the way towards 25,500–25,675, where the next supply zone lies.
On the technical front, the index is showing signs of strength. The RSI at 49 is trending higher, reflecting improving momentum, while the MACD has given a positive crossover, which typically signals the beginning of an upward move.
With strong support from the 100- and 200-day EMAs near 24,600–24,280, the downside appears well protected. This makes Nifty a candidate for a buy-on-dips strategy, with traders looking to ride the uptrend toward higher levels in the near term.
Key Resistance: 25,000, 25,500
Key Support: 24,500, 24,300
Strategy: Consider buying on dips near the 24,600 and 24,280 levels if signs of reversal appear, targeting levels of 25,500 and 25,675, with a stop-loss of 24,200 on a closing basis.
Bank Nifty - Outlook and Positioning
Dhupesh Dhameja, Derivative Research Analyst at Samco Securities
Nifty Bank gave up most of its gap-up gains as persistent selling from higher levels capped the upside, leaving the index at a crucial inflection point. While it continues to hold above recent lows, the absence of follow-through buying shows weak conviction among bulls. Divergent moves in private sector banks have further blurred directional clarity.
Derivatives data signals stiff resistance at 55,000 from heavy Call writing, while 54,000 Put positions provide immediate support, highlighting a tug-of-war. Until a decisive break unfolds, highly volatile sessions with sharp intraday reversals are expected, making an oscillating range-trading strategy the most effective approach.
Key Resistance: 54,500, 54,700, 55,000
Key Support: 53,900, 53,500, 53,300
Strategy: Traders may consider a Short Strangle strategy for the September 30 expiry by selling one lot of 54,500 CE at Rs 520 and selling one lot of 54,100 PE at Rs 513. This setup is designed to capitalize on potential range-bound momentum.
Stop-Loss: Hold the strategy until expiry with the maximum Mark-to-Market (MTM) loss capped at Rs 8,000.Target: Hold the strategy to achieve a maximum profit of Rs 16,000, or consider booking profits once the MTM gains exceed Rs 8,000.
Jay Mehta, Technical Research at JM Financial Services
Bank Nifty, structurally weaker than Nifty, formed a short-term base at the 200-day EMA this week, supported by a 75-minute positive divergence. However, the September 4 session saw the initial gap-up fully retraced, losing early bullish momentum. The index now trades well below the 20-, 50-, and 100-day EMAs, which are set to serve as strong resistance. A bearish 20/50 EMA crossover, widening spread, and downward-sloping EMAs highlight the bearish trend, backed by a daily RSI of 37 and bearish MACD below the centerline.
Weekly momentum suggests ongoing bearishness, with volatility indicators pointing to increased near-term fluctuations. Trend indicators lean bearish-to-neutral, with further weakness likely below the 200-day EMA.
Key Resistance: 54,700, 55,185, 56,160
Key Support: 53,570, 53,000, 52,650
Strategy: Sell on rallies near 54,900 and 55,000. Aggressive traders can take longs with a stop-loss below 53,500 or the 200-day EMA, targeting 54,800–54,900. Initiate shorts if 53,500 breaks, aiming for 53,000 and 52,800.
Mandar Bhojane, Senior Technical & Derivate Analyst at Choice Broking
Bank Nifty has held strong support at the 200 EMA near 53,587 and managed a breakout above 54,000, which is a positive sign. A decisive close above 54,500 could pave the way for further upside toward 55,000 and 56,000 in the near term.
On the momentum side, the RSI at 37 indicates that the index is recovering from oversold conditions, suggesting the possibility of a bullish reversal. This makes the current setup interesting for traders looking to position on the long side.
To manage risk effectively, a bull call spread strategy can be considered. The broader bias stays positive as long as Bank Nifty holds above the 53,800–53,600 support zone, making dips attractive for accumulation.
Key Resistance: 55,000, 56,000
Key Support: 53,600, 53,000
Strategy: Consider buying on dips near the 53,800 and 53,600 levels if signs of reversal appear. Target short-term upside levels of 55,000 and 56,000, with a stop-loss of 53,000 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.
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