Trading Plan: Can Nifty 50 outperform Bank Nifty amid rangebound trading?

Nifty Trading Strategy

The Nifty 50 closed higher amid rangebound trading on May 14, sustaining above all key moving averages and above Monday’s low. The volatility index has also been falling since the start of this week. Hence, momentum remains favourable for the bulls, who can gradually drive the Nifty 50 toward the 24,800–25,000 zone in the upcoming sessions. The immediate support is placed at 24,500, followed by 24,380, which is a crucial support level. Meanwhile, experts advise buying the dips in Bank Nifty. As long as the index defends the 54,400–54,500 zone, the upward trend toward 55,200–55,500 cannot be ruled out.

On May 14, the Nifty 50 rose 89 points to close at 24,667, outperforming the Bank Nifty, which fell 140 points to 54,801. Bulls maintained control over market breadth, with about 1,992 shares advancing versus 615 declining on the NSE.

Nifty Outlook and Strategy

Sudeep Shah, Deputy Vice President and Head of Technical and Derivative Research at SBI Securities

After registering its biggest single-day gain in four years on Monday, the benchmark Nifty index has entered a phase of consolidation, marked by profit booking. Despite this pause, the primary trend remains bullish, as the index continues to trade above both its short- and long-term moving averages. Additionally, the daily RSI remains in bullish territory, suggesting underlying strength.

What stands out is the resilience and relative strength of the broader markets. Over the past two sessions, both the Nifty Midcap 100 and Nifty Small Cap 100 indices have shown notable outperformance. The ratio chart of the Nifty Midcap 100 versus the Nifty 50 has climbed to a 58-day high, underscoring strong relative strength. Similarly, the Nifty Small Cap 100 ratio chart has rebounded meaningfully from recent lows.

Moreover, we are witnessing sector rotation over the past three trading sessions, with renewed buying interest in Nifty IT, India Defence, and Metal stocks — further supporting the broader market’s bullish undertone.

While the frontline index consolidates, the broader market is displaying encouraging signs of leadership and is likely to continue its outperformance in the near term. Talking about crucial levels for Nifty, the zone of 24,540-24,500 is likely to act as a crucial support for the index. If the index slips below the level of 24,500, then the next support is placed at the 24,350 level. While, on the upside, the zone of 24,670-24,700 will act as a crucial hurdle for the index. Above 24,700, the index could witness a major short-covering move towards 25,050-25,200.

Key Resistance: 24,670, 24,700, 25,050

Key Support: 24,540, 24,500, 24,350

Strategy: Buy Nifty Futures between 24,690–24,750, with a stop-loss at 24,620, targeting 24,900–24,970.

Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan

The Nifty witnessed consolidation for the second consecutive day. During the day, it tested the support cluster of 24,600–24,500 and attracted buying interest. The index has reached the 40-hour moving average and the lower Bollinger Band on the hourly chart, both of which are likely to act as strong support.

On the upside, 24,900–25,000 shall act as an immediate hurdle. This dip provides a buying opportunity, as it appears to be a brief pause in the overall upmove toward 25,300. The broader market continues to outperform for the second consecutive day. We maintain our positive stance on the index with a target of 25,300.

Key Resistance: 24,850, 24,900

Key Support: 24,600, 24,500

Strategy: Buy Nifty Futures with a stop-loss at 24,500, targeting 24,900.

Rupak De, Senior Technical Analyst at LKP Securities

The Nifty index traded within a narrow range on Wednesday, following two days of high volatility. Despite this consolidation, the short-term trend remains positive, with the index staying above key moving averages.

Following a sharp rally, this sideways movement appears to be a healthy consolidation, suggesting the market is taking a breather before its next move. As long as the index remains above the crucial support level of 24,400, the bullish momentum is likely to continue.

In the near term, there's potential for the index to move towards the 24,850–25,000 range. However, a drop below 24,400 could delay this trajectory and lead to further consolidation.

Key Resistance: 24,850, 25,000

Key Support: 24,400, 24,000

Strategy: Buy Nifty 24,700 strike Call of May 22 expiry above Rs 220, with a stop-loss at Rs 180, targeting Rs 300. Maximum profit: Rs 6,000, and Maximum loss: Rs 3,000

Bank Nifty - Outlook and Positioning

Sudeep Shah, Deputy Vice President and Head of Technical and Derivative Research at SBI Securities

Since April 23, the banking benchmark index, Bank Nifty, has been underperforming the broader Nifty. This is evident from the ratio chart, which has been forming lower lows relative to the Nifty, indicating continued relative weakness.

Despite this, the broader trend remains bullish, with the index trading above both short- and long-term moving averages. Interestingly, momentum indicators and oscillators are offering mixed signals. The daily RSI, based on range-shift principles, is moving sideways and currently declining, indicating weakening momentum.

In terms of key levels, the zone of 54,400–54,300 is expected to act as a crucial support for the index. On the upside, the 55,400–55,500 zone will serve as the immediate resistance. A decisive move beyond either of these levels is likely to trigger a directional and trending move in the index.

Key Resistance: 55,400, 55,500

Key Support: 54,400, 54,300

Strategy: Buy Bank Nifty Futures around 54,900–54,990, with a stop-loss at 54,600, targeting 55,600–56,000.

Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan

Bank Nifty has been undergoing mean reversion toward its 20-day moving average (54,700). The overall trend remains positive, and this dip should be seen as a buying opportunity. On the downside, the crucial support zone is placed at 54,400 – 54,300. On the upside, the immediate hurdle is placed at 55,400 and 56,100. Hourly and daily momentum indicators are approaching equilibrium, suggesting the consolidation phase is nearing completion and a fresh cycle could begin.

Key Resistance: 55,400, 56,100

Key Support: 54,400, 54,100

Strategy: Buy Bank Nifty Futures with a stop-loss at 54,400, targeting 55,400.

Rupak De, Senior Technical Analyst at LKP Securities

The Bank Nifty continues in its downward consolidation phase, a typical occurrence during broader uptrends. The 200-hour simple moving average (200-SMA) has consistently acted as a support.

In the short term, 54,500 is the crucial level. A decisive breach below it could trigger swift selling. Conversely, a sustained move above this level could push the index higher. Until a breakout occurs, expect consolidation within the 54,500–55,200 range.

Key Resistance: 55,200, 55,700

Key Support: 54,700, 54,500

Strategy: Buy Bank Nifty May Futures above 55,050, with a stop-loss at 54,850, targeting 55,250 / 55,400.

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