The Nifty showed healthy strength and almost achieved its 25,160 target, but profit booking wiped out some gains in late trade, resulting in a close with moderate gains. The 25,160 level is expected to act as immediate resistance for the index, as above it, all eyes will be on 25,250, which can give more strength to bulls, while the support is placed at 25,000 and then 24,850. Meanwhile, the Bank Nifty needs to give a sustainable close above key moving averages and 56,150 for an upward journey toward the 56,300–56,600 zone, followed by 57,000. However, 55,600 can act as immediate support, followed by 55,000 being a crucial support, according to experts.
On August 21, the Nifty 50 rose 33 points to 25,084, while the Bank Nifty gained 57 points to 55,755. The market breadth was equal, with 1,381 shares declining compared to 1,350 advancing shares on the NSE.
Nifty Outlook and Strategy
Dhupesh Dhameja, Derivative Research Analyst at Samco Securities
Nifty extended its winning streak to a sixth session, with buyers firmly absorbing every dip. The index is forming higher lows, keeping momentum constructive despite trading stretched from its 10-DEMA. A decisive breakout above 25,150 could unleash fresh upside toward 25,250, forcing Call writers into aggressive unwinding. On the flip side, 24,850–25,000 has now emerged as a strong demand zone, cushioning declines and reinforcing bullish sentiment. As long as this base holds, buyers are expected to dominate, making a “buy-on-dips” strategy the best play in the current market setup.
Key Resistance: 25,250, 25,350, 25,500
Key Support: 25,000, 24,850, 24,700
Strategy: Traders may consider a Bull Put Spread strategy for the August 28 expiry by buying one lot of 25,150 PE at Rs 139 and selling one lot of 25,300 PE at Rs 234. 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 4,099 Target: Hold the strategy until expiry to achieve a maximum profit of Rs 7,151, or consider booking profits once the MTM gains exceed Rs 4,200
Jay Mehta, Technical Research at JM Financial Services
Following a 1,330-point correction from its June 31 peak, Nifty found support at 24,330 and has recovered over 50% of the decline. It is now nearing a key resistance at 25,160, which aligns with the 61.8% Fibonacci retracement of the recent fall. Beyond this, resistance lies at 25,370–25,400, coinciding with a bearish gap formed on July 11. Currently, Nifty is testing the upper Bollinger Band, with a negative-to-flat slope, and Thursday's candle formed a small-ranged red candle, suggesting a potential short-term pause at this resistance zone.
Trading above all key moving averages, pullbacks to these levels could present buying opportunities. Robust support is established at 24,600, where the 100EMA aligns with a bullish gap from August 18. Strong volume in Nifty components, particularly in Auto, IT, and Consumer Durables sectors, is bolstering the index. Immediate supports are at 24,950 and 24,800. Momentum indicators show bullish sentiment, with RSI above 50 and MACD, though below the zero line, displaying a widening spread, supporting a buy-on-dip strategy.
Key Resistance: 25,160, 25,370, 25,400
Key Supports: 24,950, 24,800, 24,600
Strategy: Buy on dips near moving averages or supports at 24,950, 24,800, and 24,600, with a stop-loss below 24,500, targeting 25,160 and 25,370–25,400.
Mandar Bhojane, Senior Technical & Derivative Analyst at Choice Broking
Nifty on the daily chart continues to make higher highs and sustain above the 25,000 mark, indicating strong underlying bullish sentiment. On Thursday, despite a gap-up opening followed by profit booking at higher levels, the index managed to hold above the previous day’s close, reflecting resilience and ongoing accumulation. If Nifty sustains and breaks out above the 25,250 level, it could trigger the next leg of the rally toward 25,600 and 25,800 in the upcoming sessions.
On the flip side, 25,000 and 24,900 will act as immediate supports and can be considered buying opportunities on dips.
From a technical perspective, the RSI stands at 57.88 and is trending upward, suggesting strengthening momentum. The MACD has also given a positive crossover, which further reinforces the bullish outlook and supports the case for continuation of the uptrend.
Key Resistance: 25,600, 26,000
Key Support: 24,850, 24,700
Strategy: Buy Nifty Futures on dips near 25,000–24,900 with a stop-loss at 24,700 on a closing basis, aiming for 25,600 and 26,000 as upside targets.
Bank Nifty - Outlook and Positioning
Dhupesh Dhameja, Derivative Research Analyst at Samco Securities
Nifty Bank continues to trade sideways, confined to the 56,100–55,500 range for four sessions, as heavyweight banks fail to provide decisive cues. Strong Put writing at 55,500 has created a dependable support zone, while aggressive Call writing at 56,000 has capped upside momentum. Price action shows dips being bought near the 10-DEMA, keeping the undertone constructive. A clear move above 56,000–56,100 could spark short covering and fuel a rally, while a breach below 55,450 may drag the index to 55,000. Until then, a range-trading strategy remains most effective.
Key Resistance: 55,850, 56,000, 56,150
Key Support: 55,500, 55,300, 55,000
Strategy: Traders may consider a Short Strangle strategy for the August 28 expiry by selling one lot of 56,000 CE at Rs 228 and one lot of 55,700 PE at Rs 225. This setup aims to profit from range-bound, oscillating price action while keeping directional exposure limited.
Stop-Loss: Traders may hold the strategy with MTM losses limited to Rs 7,500 Target: Hold the strategy until expiry to achieve a maximum profit of Rs 15,883, or consider booking profits once the MTM gains exceed Rs 8,000
Jay Mehta, Technical Research at JM Financial Services
Bank Nifty is lagging behind Nifty, which has exceeded its August 18 high and trades well above its key moving averages. Bank Nifty, however, is encountering resistance and trading below its August 18 high, which aligns with the 50% Fibonacci retracement of its recent fall, and is currently trading near its 20 and 50 EMAs. Despite an uptick in price this week, low trading volume reflects limited participation from banking stocks.
Momentum remains weak, with RSI struggling to break above 50 (currently at 49), and other indicators pointing to possible consolidation or minor profit booking. Positively, Bank Nifty has established a strong base at the 100EMA around 54,900.
Key Resistance: 56,160, 56,530
Key Support: 55,600, 55,340
Strategy: Monitor for consolidation or profit booking near resistances at 56,160 and 56,530. Consider buying on dips near supports at 55,600 or 55,340, with a stop-loss below 55,000. For a conservative approach, wait for a breakout above 56,160, targeting 56,500–56,530.
Mandar Bhojane, Senior Technical & Derivative Analyst at Choice Broking
Bank Nifty has been consolidating in a narrow range between 56,000–55,600 for the past four trading sessions, indicating indecision among market participants. A decisive close above the 56,000 mark could open the way for an upside move toward the 56,400 and 57,200 levels. On the flip side, if the index breaks below 55,600, a small corrective move toward 55,400–55,200 is likely, which can be considered a buying opportunity for positional traders.
From a technical standpoint, Bank Nifty is currently trading between the 20- and 50-day EMAs, showing consolidation within the ongoing trend. The RSI is placed at 48.16, suggesting a neutral to slightly weak momentum, though not in oversold territory. Meanwhile, the MACD has given a positive crossover, indicating the potential for a bullish reversal if price action confirms.
Key Resistance: 56,400, 57,200
Key Support: 55,600, 55,400
Strategy: Consider buying on dips near the 55,400 and 55,200 levels if signs of reversal appear. Target short-term upside levels of 56,400 and 57,200, with a stop-loss of 55,200 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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