Trading Plan: Can Nifty 50 snap 7-day rally, Bank Nifty defend 54,700?

Nifty Trading Plan

The Nifty 50 sustained a higher trend for the seventh consecutive session, but the Bank Nifty snapped its six-day rally on April 23, forming a Hanging Man-type pattern (a bearish reversal pattern) at the highs and a Bearish Belt Hold pattern on the daily charts, respectively. Hence, experts advised caution. They expect the Nifty 50 to consolidate with key support in the 24,000–23,900 zone; however, on the higher side, 24,550 is expected to act as the resistance zone. The Bank Nifty needs to sustain above 54,700 in the short term for a rebound toward 56,100, but if it falls below this level, selling pressure may emerge, experts said.

On Wednesday, April 23, the Nifty 50 rallied 162 points to 24,329, while the Bank Nifty dropped 277 points to 55,370, with overall market breadth remaining balanced. A total of 1,305 shares gained compared to 1,262 declining shares on the NSE.

Nifty Outlook and Strategy

Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan

On the daily charts, the Nifty is now approaching the 61.82 percent Fibonacci retracement level (24,550) of the September to April decline (i.e., 26,277 – 21,743). The upmove is likely to be slow from here on, and sector rotation is likely over the next few weeks. On the downside, the crucial support is placed at 24,000. Traders should make use of a trailing stop-loss mechanism for their long positions and also consider booking profits as the Nifty approaches crucial resistance levels.

Key Resistance: 24,359, 24,550

Key Support: 24,120, 24,000

Strategy: Buy Nifty Futures with a stop-loss of 24,100, targeting 24,550–24,600.

Vidnyan S Sawant, Head of Research at GEPL Capital

The Nifty has recovered more than 50 percent of its recent decline in just three weeks, highlighting a strong bullish undertone in the market. On the daily chart, the index has given a breakout from a Double Bottom pattern, confirming a trend reversal. Additionally, the daily RSI (Relative Strength Index) has sustained above the 60 mark, indicating continued positive momentum.

Key Resistance: 24,860, 25,250

Key Support: 24,000, 23,800

Strategy: Buy Nifty Futures with a stop-loss of 24,000, targeting 24,860 and 25,250.

Vatsal Bhuva, Technical Analyst at LKP Securities

On Wednesday, a Hanging Man candlestick appeared on the daily chart, signaling a potential pause in the ongoing rally. A short-term correction toward 23,100, where the 20-hour EMA lies, is possible. However, the broader trend remains bullish as long as the Nifty holds above 23,900 on a closing basis.

Key Resistance: 24,500

Key Support: 24,050

Strategy: Conditional sell Nifty May Futures below 24,380 with a strict stop-loss at 24,490, targeting 24,220. The maximum profit in this strategy is Rs 13,500, while the maximum loss is Rs 8,250.

Bank Nifty - Outlook and Positioning

Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan

Bank Nifty is likely to consolidate after a rally of 6,187 points (12.4%) over the previous eight trading sessions. It has reached around the 56,000 mark, where the maximum open interest on the Call side is placed. We expect Bank Nifty to consolidate going forward. The likely consolidation range is 56,000–54,500.

Key Resistance: 55,500, 55,900

Key Support: 54,680, 54,360

Strategy: Sell Bank Nifty Futures on a rise to 55,500 with a stop-loss of 55,900, targeting 54,300–54,000.

Vidnyan S Sawant, Head of Research at GEPL Capital

Bank Nifty has clearly outperformed the benchmark Nifty, hitting a fresh all-time high of 56,098 this week. On the daily chart, it has maintained strong support above its previous lifetime high, reaffirming bullish sentiment. Moreover, the RSI continues to sustain above the 60 level, signaling robust positive momentum.

Key Resistance: 56,100, 57,000

Key Support: 54,800, 54,000

Strategy: Buy Bank Nifty Futures at current market price with a stop-loss of 54,800, targeting 56,100 and 57,000.

Vatsal Bhuva, Technical Analyst at LKP Securities

After a sharp rally from the 50,500 levels, the Bank Nifty index formed a bearish candlestick on the daily chart on Wednesday, signaling a potential pause in the ongoing uptrend. The RSI on the daily timeframe stands at 73.8, indicating overbought conditions, while the hourly chart shows a bearish crossover in RSI, hinting at a possible short-term retracement. Despite these signs of consolidation, the broader undertone and overall trend for the index remain positive, suggesting buying interest may resume after a mild correction.

Key Resistance: 56,100

Key Support: 54,800

Strategy: Sell Bank Nifty May Futures below 55,380, with a stop-loss at 55,630, targeting 54,880. The maximum profit in this strategy could be Rs 15,000, while the maximum loss is Rs 7,500.