Trading Plan: Can Nifty 50 sustain above 25,000, Bank Nifty hold 56,000 zone?

Nifty Trading Plan for October 07

The Nifty 50 bulls entered into healthy momentum by clearing all key moving averages and the midline of Bollinger Bands. Hence, the index is likely to face a hurdle at 25,200–25,250, followed by 25,400–25,450 being key resistance. However, the support is placed at 25,000–24,900. Meanwhile, as long as the Bank Nifty holds the 56,000 zone, the rally toward 56,800 and then 57,628 (record high) is possible in the short term, while 55,700–55,800 can be the support zone, according to experts.

On October 6, the Nifty 50 soared 183 points (0.74 percent) to 25,078, while the Bank Nifty rallied 516 points (0.93 percent) to 56,105. However, the market breadth was in favour of bears. About 1,614 shares saw selling pressure compared to 1,227 shares that gained on the NSE.

Nifty has been moving up since the RBI monetary policy day. Banks and financial services, which contribute the most to the Nifty, have witnessed short covering. Apart from these two sectors, the automobile, metals, and oil marketing sectors are likely to see a further uptrend. The retail space did see some downside, but it doesn’t have much weight in the Nifty.

Now, if the IT sector shows some short covering, then the Nifty may easily climb towards 25,500; else, it may face some hurdle near its recent previous peak of 25,400 levels. On the lower side, 24,800 is an immediate support; hence, the short-term range is 25,400–24,800 levels. The results season will start soon now, hence an increase in IVs (implied volatility) can't be ruled out.

Key Resistance: 25,200, 25,400

Key Support: 24,800, 24,600

Strategy: Buy Nifty Futures near 25,000, with a stop-loss below 24,800, targeting 25,200 and 25,400.

Currently, Nifty is sustaining above the crucial 25,000 mark, which was earlier acting as major resistance, indicating underlying market strength. In the previous session, Nifty gave a breakout above the Ichimoku Cloud, which also coincides with a triangle pattern breakout, reinforcing the bullish structure.

On the indicator front, the RSI has once again reversed from the 40 zone and is now positioned near 55, reflecting improving momentum. Overall, these technical signals suggest that the bullish trend is likely to continue, although some short-term pullbacks may occur as part of a healthy consolidation within the ongoing uptrend.

Key Resistance: 25,300, 25,400

Key Support: 25,000, 24,900

Strategy: Buy Nifty Futures in the 25,100–25,180 zone, with a stop-loss of 24,900, targeting 25,550.

From a technical perspective, sustaining above 25,000 is crucial. The 25,200 mark is likely to act as a near-term cap, but a decisive breakout beyond it could trigger a fresh wave of short covering. On the derivatives front, consistent open interest buildup at the 25,000 strike reinforces this level as strong support, offering a safety net for the market. Investor sentiment remains broadly positive, and traders may view any dips as opportunities to buy.

Key Resistance: 25,200, 25,400

Key Support: 25,000, 24,800

Strategy: Buy Nifty Futures on dips near 25,100, with a stop-loss below 24,800, targeting 25,400.

The Bank Nifty has witnessed a good round of short covering since the RBI monetary policy. Now, the PSU banks so far have outperformed the private sector banks on an overall basis. However, Axis Bank and Kotak Mahindra Bank have recently performed well and outperformed their private sector bank peers.

So, overall, it has witnessed short covering, and it has managed to surpass its recent previous peak, unlike the Nifty, which is yet to do that. This indicates that the Bank Nifty is relatively stronger than the Nifty, mainly because the Nifty IT is underperforming as well as Reliance Industries. Now, on the lower side, 56,000 is an immediate support, whereas 57,000 is an immediate target; hence, the range is 57,000–56,000 levels.

Key Resistance: 57,000, 57,500

Key Support: 55,500, 55,000

Strategy: Buy Bank Nifty Futures at CMP as well as on dips near 55,500, with a stop-loss below 55,000, targeting 57,000 and 57,500.

At present, Bank Nifty has surpassed its previous swing high of 55,835, confirming a breakout above the Ichimoku Cloud and currently hovering around 56,087, indicating strong bullish momentum. On the indicator front, the RSI has once again reversed from the 40 zone and is now placed near 63, reflecting renewed strength in momentum.

Additionally, the MACD has displayed a bullish crossover, further supporting the positive outlook. These technical signals collectively suggest that the bullish momentum is likely to continue, with Bank Nifty expected to maintain its upward trajectory in the near term, supported by sustained buying interest.

Key Resistance: 57,000, 57,200

Key Support: 55,700, 55,500

Strategy: Buy Bank Nifty Futures in the 56,200–56,100 zone, with a stop-loss of 55,800, targeting 57,000.

The Bank Nifty continued its recovery to begin the week on a positive note and is trading comfortably above its 20-week exponential moving average (EMA) on the daily charts, indicating that the sector is maintaining its underlying strength. Strong performances from key private banks like HDFC Bank and Kotak Mahindra Bank added to the positive sentiment.

Technically, the index is displaying a cautiously bullish trend. Traders should keep an eye on the 55,200 support level, which is crucial for maintaining the upward momentum. On the upside, a decisive move above 56,400 could open the door for further gains. Overall, the charts suggest a positive setup, and dips toward support levels may offer attractive buying opportunities in the banking space.

Key Resistance: 56,400, 56,800

Key Support: 55,900, 55,400

Strategy: Buy Bank Nifty Futures on dips near 55,900, with a stop-loss below 55,400, targeting 56,600.