Trading Plan: Can Nifty 50 defend 24,500, Bank Nifty march toward 56,000?

Nifty Trading Plan for August 8

The strong buying interest at lower levels helped the Nifty 50 rebound 250 points from the day’s low and close with moderate gains on August 7. However, the sustainability of those gains is key to watch, given the bearish outlook in the near term. As long as the index holds the 24,500–24,400 levels (support) on a closing basis, a gradual move toward 24,700–24,900 cannot be ruled out. However, a break of the support can again strengthen the bears. Meanwhile, the Bank Nifty took support at 55,000–54,900 (around the 100-day EMA) and bounced back. If the index defends this zone, the chances of crossing 56,000 are high, but falling below support may bring renewed selling pressure in the index, according to experts.

On August 7, the Nifty 50 rose 22 points to 24,596, while the Bank Nifty climbed 110 points to 55,521. However, the market breadth remained negative: about 1,478 shares saw downward moves, compared to 1,205 shares that advanced on the NSE.

Nifty Outlook and Strategy

Dhupesh Dhameja, Derivative Research Analyst at Samco Securities

Nifty showcased classic expiry-day volatility but ended on a strong note, forming a bullish pin bar at the key 24,500 level, signaling a potential short-term bottom. The rebound, driven by short-covering and oversold mean reversion, reflects buyers’ intent to defend crucial levels. Derivatives data confirms the shift: Put writers re-entered at-the-money strikes while Call writers unwound positions, pushing the PCR sharply up to 1.02. The sharp bounce, despite macro headwinds, hints at growing resilience. As long as 24,500 holds, bulls are likely to dominate. A buy-on-dips strategy looks ideal, with upside potential toward 24,900–25,000 in the near term.

Key Resistance: 24,700, 24,900, 25,100

Key Support: 24,500, 24,400, 24,200

Strategy: Traders can execute a Call Ratio Backspread strategy for the August 14 expiry by buying two lots of the 24,650 CE at Rs 146 and selling one lot of the 24,550 CE at Rs 205. This setup is designed to capitalize on a potential upside move while limiting downside risk.
Stop-Loss: Hold the strategy until expiry, with the maximum Mark-to-Market (MTM) loss capped at Rs 6,500.Target: Hold the strategy until expiry to achieve a maximum profit of Rs 14,000, or consider booking profits once MTM gains exceed Rs 7,000.

Jay Mehta, Technical Research at JM Financial Services

Following five weeks of bearish candles, Nifty may form a spinning top, doji, or hammer this week, indicating buying interest around 24,400. It’s finding support near the 26-week EMA at 24,429, coinciding with the lower end of its May–June range, which could drive a gradual pullback toward 24,800, 25,000, and 25,250—provided it holds above 24,400.

However, trading below the daily 20- and 50-EMAs and a bearish crossover between the two suggests these levels may act as dynamic resistance, limiting sharp upward moves. A gradual upmove can still be expected. Momentum indicators on the daily and weekly charts reflect weak bullish momentum, with a risk of further declines if 24,400 is breached. The short-to-medium-term trend remains weak, marked by lower highs and lows, but bolstered by strong support at 24,400. A close below this level could intensify selling, potentially driving prices to 24,000 or 23,790.

Key Resistance: 24,800, 25,070, 25,250

Key Support: 24,400, 24,000, 23,790

Strategy: For a conservative approach, wait for a breakout above 25,000 to buy. For a riskier trade, buy with a stop-loss on a daily closing basis below 24,400, targeting 24,800 and 25,000. Alternatively, short-sell on a close below 24,400 or sell on rises near resistance levels as a cautious strategy.

Hardik Matalia, Derivative Analyst at Choice Broking

On the daily chart, the Nifty 50 formed a strong bullish-bodied candlestick with a pronounced lower wick and a slight upper wick, indicating aggressive buying from the lows and some profit-booking at higher levels. This price action reflects a potential short-term reversal setup. On the downside, immediate support is placed near the 24,500 mark, followed by the 24,400 zone. As long as the index holds above the 24,400 level on a closing basis, a ‘buy-on-dips’ strategy may be considered.

On the upside, immediate resistance is seen around 24,700, followed by a crucial hurdle in the 24,800–25,000 range. A sustained move above this resistance zone would be essential to confirm any meaningful upside continuation. Strong intraday buying from lower levels suggests improving sentiment; however, traders should remain cautious and maintain proper risk management while participating in the market.

Key Resistance: 24,700, 24,800

Key Support: 24,500, 24,400

Strategy: Buy on dips near the 24,500 level for a target of 24,800–25,000, with a stop-loss at 24,400 on a closing basis.

Bank Nifty - Outlook and Positioning

Dhupesh Dhameja, Derivative Research Analyst at Samco Securities

Nifty Bank saw wild intraday swings but ended with a strong comeback, forming a decisive bullish candle above the 55,500 mark—its first convincing signal of strength in two weeks. The rebound, driven by short-covering and intraday oversold signals, indicates fresh base-building near the 55,000 psychological and technical support. Derivative positioning shows Put writers returning to key strikes, hinting at renewed confidence. Meanwhile, the strong rejection of lower levels suggests weak-hand liquidation is largely behind. A sustained move above 55,720 could unlock further upside toward 56,200. As long as 55,000 holds, buyers will likely dominate, making ‘buy on dips’ the preferred strategy.

Key Resistance: 55,700, 55,900, 56200

Key Support: 55,000, 54,800, 54,500

Strategy: Traders can consider buying Nifty Bank August Futures if the price crosses above 55,900–55,950, setting a stop-loss below 55,700. Profit-taking can be considered once the index reaches 56,250–56,320.

Jay Mehta, Technical Research at JM Financial Services

Bank Nifty formed a distribution range at the top and broke below the range support at 56,230, where it had traded from June 24 to July 25. This week, it dipped below 55,500 and made a low of 54,973, finding support at the 100EMA and reclaiming levels above 55,500. Currently, it trades below the 20- and 50-EMAs, but above the 100- and 200-EMAs. A critical support lies at 55,000; a decisive break below could lead to declines toward 54,470 or 53,800.

Resistances are at 56,000 and 56,400. Momentum indicators on daily and weekly timeframes suggest consolidation or further downside if 55,000 is breached. August seasonality indicates a 59% chance of negative performance, with an average return of -0.8%. The short-to-medium-term trend is sideways to mildly bearish, with increased selling pressure likely only on a close below 55,000.

Key Resistance: 56,000, 56,400

Key Support: 55,000, 54,470, 53,800

Strategy: For a conservative approach, wait for a breakout above 56,000 to initiate a buy. For a riskier trade, buy with a stop-loss on a daily closing basis below 55,000, targeting 56,000 and 56,400. Alternatively, short-sell on a close below 55,000.

Hardik Matalia, Derivative Analyst at Choice Broking

On the daily chart, Bank Nifty formed a bullish-bodied candlestick with a long upper wick and a slight lower wick, reflecting intraday buying interest from lower levels but some profit-booking at higher zones. Despite the recovery, the index continues to trade below both its short-term (20-day) and medium-term (50-day) EMAs, signaling underlying near-term weakness. On the downside, immediate support is seen at 55,300, followed by a more critical level near 55,000.

As long as the index sustains above the 55,000 mark on a closing basis, a 'buy-on-dips' approach can be considered. On the upside, resistance is placed around 55,800, followed by 56,000. A decisive break and sustained trade above these levels would be needed to regain bullish momentum. While the intraday recovery is encouraging, traders should remain cautious and adopt a stock-specific approach with strict stop-losses amid ongoing market fluctuations.

Key Resistance: 55,800, 56,000

Key Support: 55,300, 55,000

Strategy: Buy on dips near the 55,300 level for a target of 55,800–56,000, with a stop-loss at 55,000 on a closing basis.

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