Trading Plan: Can Nifty 50 continue its uptrend and reclaim 25,200, Bank Nifty surpass 57,300?

Nifty Trading Plan for July 22

The Nifty 50 and Bank Nifty bounced back smartly on July 21, with the latter index outperforming the former. As long as the Nifty holds the 25,000-24,900 support zone, an upward journey toward 25,200-25,300 is possible in the upcoming sessions, followed by 25,500. However, decisively breaking this support could push the index down toward 24,700. Meanwhile, the Bank Nifty is expected to move toward the previous week’s high of 57,300, followed by a record high of 57,628, if it manages to defend the 56,600-56,500 support zone. If the index falls below this support, the 56,300-56,000 levels will be crucial to watch, experts said.

On July 21, the Nifty 50 rebounded by 122 points to 25,091, while the Bank Nifty finished at 56,953, up 670 points despite the market breadth slightly in favour of bears. A total of 1,392 shares saw correction, compared to 1,295 shares that gained on the NSE.

Nifty Outlook and Strategy

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

The Nifty managed to bounce back sharply on the first day of the current week after falling below the 24,900 levels. The bounce was highly probable, as the index had become oversold — the PCR (Put Call Ratio) had fallen to nearly 0.58, and implied volatility (IVs) had dropped to 9.85, with an IV Percentile of 0.80. This still indicates a potential expansion in volatility as the index approaches the weekly and monthly expiry.

There was aggressive Put addition on Monday from the 24,900 strike to the 25,100 strike, coupled with Call unwinding at the 25,000 and 25,200 strikes. This suggests that 24,900 is a critical support level for this week, with 25,500 as the immediate resistance. Currently, there is a 600-point range. A break above 25,500 or below 24,900 levels will trigger the next trending move.

Key Resistance: 25,200, 25,500

Key Support: 25,000, 24,900

Strategy: Buy Nifty Futures at 25,090 and add on dips near 25,000, with a stop-loss at 24,850, targeting 25,200 and 25,500.

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

On the hourly chart, a bullish Bat pattern has emerged with a reversal zone near 24,900, supported by a bullish divergence on the 60-minute RSI. Notably, the Nifty breached both R3 daily and monthly resistances at 25,030 and 25,060, respectively. With the long-short ratio at just 15% (as of July 18), short-covering may fuel further upside.

Key Resistance: 25,300, 25,400

Key Support: 25,000, 24,900

Strategy: Buy Nifty Futures in the 25,050-25,150 zone, with a stop-loss at 24,850, targeting 25,500.

Vidnyan S Sawant, Head of Research at GEPL Capital

After hitting a high of 25,670, the Nifty has been forming a lower high-lower low pattern over the past three weeks, suggesting profit booking at higher levels. On the daily chart, the index is currently taking support at its 50-day Exponential Moving Average (EMA), indicating the formation of a short-term base. However, the Relative Strength Index (RSI) remains below the 50 level, signaling a lack of positive momentum.

Key Resistance: 25,300, 25,500

Key Support: 24,800, 24,400

Strategy: Sell Nifty Futures on a rise near 25,300, targeting 24,800 and 24,400, with a stop-loss at 25,500.

Bank Nifty - Outlook and Positioning

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

The Bank Nifty has managed to recover quite smartly and has been outperforming the Nifty. There was aggressive Call unwinding from the 56,300 to 57,000 strikes and strong Put additions from 56,600 to 57,000 strikes. From here, 57,000 is the critical resistance. This level holds the highest Call base, and above this, there is a high possibility of a breakout and a new lifetime high.

Key Resistance: 57,000, 57,500

Key Support: 56,500, 56,000

Strategy: Buy Bank Nifty Futures above 57,000 or on dips near 56,500, with a stop-loss at 55,900, targeting 57,500 and 58,000.

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

Bank Nifty displayed resilience by consistently trading above the R3 Camarilla daily pivot resistance at 56,420, reflecting sustained buying interest at lower levels. A key technical development was the reclaiming of the S3 Camarilla monthly pivot at 56,635, which had earlier acted as strong resistance. The Bank Nifty ended the session just below the 57,000 mark, signaling robust momentum in the banking space.

Additionally, the daily RSI reversed from the 45 level, indicating improving strength and supporting the likelihood of continued upside in the coming sessions. With key levels being retested and reclaimed, and sentiment buoyed by solid bank earnings, the outlook for Bank Nifty remains constructive in the near term.

Key Resistance: 57,300, 57,500

Key Support: 56,600, 56,300

Strategy: Buy Bank Nifty Futures in the 57,000-56,800 zone, with a stop-loss at 56,500, targeting 57,550.

Vidnyan S Sawant, Head of Research at GEPL Capital

The Bank Nifty continues to outperform the broader market, consolidating sideways near its record high for the past four weeks. On the daily chart, the index is maintaining a higher high-higher low structure, reflecting underlying strength. The RSI remains above the 50 level and is trending upward, reinforcing the bullish undertone of the index.

Key Resistance: 57,600, 58,400

Key Support: 56,000, 55,000

Strategy: Buy Bank Nifty at CMP for a target of 57,600 and 58,400, with a stop-loss at 56,000.

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.