Trading Plan: Can Nifty 50 defend 25,000, Bank Nifty hold above 55,800 amid consolidation?

Nifty Trading Plan for October 09

The Nifty 50 saw some profit booking, but overall, the trend remains favourable, given the index is trading above all key moving averages. Hence, if the index decisively manages to take out the 25,200–25,250 zone, a rally toward 25,450 (September high) is possible. Until then, consolidation may continue with support at 25,000–24,900. Meanwhile, the Bank Nifty also witnessed profit booking, which was on expected lines, but the trend is still up. The banking index is expected to take support at 55,700–55,600. As long as it holds, 56,300–56,500–56,800 are the levels to watch. However, below this zone, the bears may gain some strength, experts said.

On October 8, the Nifty 50 slipped 62 points to 25,046, and the Bank Nifty was down 221 points to 56,018. The market breadth was weak: about 1,687 shares were dominated by bears, compared to 1,122 shares that saw buying interest on the NSE.

Nifty Outlook and Strategy

Sudeep Shah, Head - Technical Research and Derivatives at SBI Securities

After rebounding sharply from the recent low of 24,588, the benchmark index Nifty surged over 600 points in just four trading sessions, reflecting a strong short-term recovery. However, the momentum appeared to stall on Tuesday, as the index failed to sustain above the 25,200 mark, triggering profit booking at higher levels.

On the daily chart, Nifty formed a Shooting Star-like candlestick pattern on Tuesday, followed by a bearish candle with a pronounced upper shadow — signalling selling pressure near the 25,200 level. The presence of long upper shadows in the last two sessions suggests that bulls are struggling to hold ground beyond key resistance zones.

A notable aspect of the recent rally has been the leadership of heavyweight banking stocks, which played a pivotal role in driving the index higher. However, over the past two sessions, these stocks have entered a phase of consolidation, indicating a potential pause in their upward trajectory.

The current price action hints at a sideways to mildly bearish bias for the coming sessions, with traders likely to remain cautious ahead of key macro and corporate triggers.

The zone of 25,200–25,250 will act as a crucial hurdle for the index. Any sustainable move above 25,250 will lead to a sharp upside rally up to the prior swing high of 25,448. On the downside, the 24,900–24,850 zone will act as crucial support.

Key Resistance: 25,200, 25,250, 25,448

Key Support: 24,900, 24,850

Strategy: Buy Nifty Futures around 25,040–25,120, with a stop-loss of 24,980, targeting 25,280.

Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research) at Centrum Broking

The Nifty index encountered resistance at the 25,200 level, forming consecutive Shooting Star candlesticks on the daily chart. Despite this, it held firm at the psychological support of 25,000, which also aligns with the 21-day moving average, and witnessed a mild rebound from lower levels. Going forward, some consolidation can be expected before a potential upward move resumes.

The broader trend remains positive as long as Nifty holds above 24,840, which corresponds to the 50-day moving average on the spot. However, persistent selling pressure near the resistance zone is capping the upside. A decisive breakout above the 25,200 mark is crucial to unlock further gains.

If Nifty Futures manage to break above 25,200, a short-covering rally could push the index higher toward the 25,340 level.

(All spot levels)
Key Resistance: 25,190, 25,340

Key Support: 25,000, 24,840

Strategy: Buy Nifty Futures above 25,200, with a stop-loss of 25,090, targeting 25,340.

Rupak De, Senior Technical Analyst at LKP Securities

The Nifty appears to be consolidating in a downward trend following a sharp upmove from the 24,600 levels. So far, it has retraced up to the 38.20% Fibonacci level of the previous rise from 24,587 to 25,220, which seems to be a correction within an ongoing rally. The current uptrend is likely to remain intact as long as the index stays above 24,970. The sentiment might change below 24,970–24,940. On the higher side, resistance is placed at 25,250 and 25,400–25,500 levels.

Key Resistance: 25,250, 25,400

Key Support: 24,940, 24,800

Strategy: Buy Nifty October 14, 25,000 strike Put above Rs 80, with a stop-loss of Rs 49, targeting Rs 130.

Bank Nifty - Outlook and Positioning

Sudeep Shah, Head - Technical Research and Derivatives at SBI Securities

The Bank Nifty index has emerged as a clear outperformer in the recent pullback rally, contributing significantly to the gains in frontline indices. Its strong momentum propelled it to a high of 56,502, marking a robust recovery phase. However, post this peak, the index has witnessed profit booking, indicating short-term exhaustion at higher levels.

Despite the profit booking, the broader trend remains bullish, supported by the fact that Bank Nifty continues to trade above its key moving averages, which act as dynamic support zones. Additionally, the daily RSI remains comfortably above the 60 mark, reflecting underlying strength and suggesting that the index is still in a positive momentum zone.

The current consolidation could be a healthy pause before the next directional move.

The zone of 55,600–55,500 will act as important support for the index. On the upside, the zone of 56,300–56,400 will act as an immediate hurdle. Any sustainable move above 56,400 will lead to a sharp upside rally up to the 57,000 level in the short term.

Key Resistance: 56,300, 56,400, 57,000

Key Support: 55,600, 55,500

Strategy: Buy Bank Nifty Futures around 56,050–56,220, with a stop-loss of 55,700, targeting 56,500–56,650.

Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research) at Centrum Broking

Bank Nifty showed relative underperformance compared to the Nifty index but managed to close above the 56,000 mark, offering some short-term relief. The immediate support lies at the 100-day moving average, placed around 55,700, and a breakdown below this level could lead to further downside toward the next key support at 55,200. On the flip side, a decisive move above 56,300 could trigger a follow-up rally toward the 57,000 level.

Meanwhile, momentum indicators and oscillators remain in buy mode on the daily chart, suggesting the broader undertone continues to be positive despite recent consolidation.

(All spot levels)
Key Resistance: 56,300, 56,900

Key Support: 55,700, 55,200

Strategy: Buy Bank Nifty Futures above 56,500, with a stop-loss of 56,100, targeting 56,900/57,300.

Rupak De, Senior Technical Analyst at LKP Securities

Bank Nifty remained in weak hands as the index failed to sustain higher, leading to a weak closing for the day. However, the overall trend remains strong as the index stayed above the previous swing high. The 21 EMA has moved above the 50 EMA, confirming improving bullish sentiment.

The short-term sentiment might remain strong as long as it holds above 55,500. On the upside, resistance is positioned at 56,500. A rangebound movement may well become a reality in the next few days or until the index moves decisively beyond 56,500.

Key Resistance: 56,000, 56,500

Key Support: 55,700, 55,500

Strategy: Buy Bank Nifty October 56,000 Call above Rs 700, with a stop-loss of Rs 600, targeting Rs 900.

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.