Trading Plan: Can Nifty 50 sustain above 25,000, continue to outperform Bank Nifty?

Nifty Trading Plan for August 21

The Nifty closed above the psychological 25,000 mark, continuing its northward journey for the fifth consecutive session, with technical indicators favouring the bulls. Hence, according to experts, as long as the index defends 24,850 as support, the rally toward 25,250 (immediate target), followed by 25,350–25,400, can't be ruled out. Meanwhile, Bank Nifty underperformed the Nifty 50. The banking index needs to reclaim and sustain above 55,800 for an upward journey toward 56,100–56,500. Until then, consolidation may continue, with 55,500 as support, as a decisive fall below this level could bring bears into action.

On August 20, the Nifty 50 advanced 70 points (0.28%) to 25,051, while the Bank Nifty fell 167 points (0.3%) to 55,699. The market breadth remained positive for another session, with 1,553 shares rising, compared to 1,164 declining shares on the NSE.

Nifty Outlook and Strategy

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

In the first trading session of the week, the Nifty opened with a strong upside gap, supported by positive developments such as S&P Global Ratings upgrading India’s sovereign outlook and PM Modi’s announcement of next-gen GST reforms by Diwali, aimed at easing the tax burden on consumers and MSMEs.

The rally extended into Tuesday and Wednesday, with the index closing above the psychological 25,000 mark. Technically, the Nifty is trading above its key moving averages, which are beginning to slope upward—indicating strengthening trend dynamics. Momentum indicators are also turning favourable. The daily RSI is approaching 60 in a rising trajectory, while the MACD histogram signals a pickup in bullish momentum.

Considering the current chart structure, the index is likely to test 25,250 in the short term, while on the downside, the 24,900–24,850 zone will act as important support.

Key Resistance: 25,250

Key Support: 24,900, 24,850

Strategy: Buy Nifty Futures between 25,020–25,090, with a stop-loss at 24,930, targeting 25,230–25,320.

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

The markets continued their upward momentum for the fifth straight session, with the Nifty index surpassing its 50-day moving average, currently positioned above 25,000. The week began with a gap-up opening, and the gap area around 24,850 is now expected to act as a strong support zone. Momentum indicators and oscillators have turned positive on the daily chart, suggesting strength. The overall structure indicates the formation of a short-term base, and any dips should be viewed as buying opportunities.

Key Resistance: 25,245, 25,350

Key Support: 25,000, 24,850

Strategy: Buy Nifty Futures with a stop-loss at 24,960, targeting 25,245/25,350.

Rupak De, Senior Technical Analyst at LKP Securities

Sentiment is likely to favour the bulls as the Nifty 50 has sustained above the 21 EMA for the past three sessions. Additionally, Put writers have outnumbered Call writers for the first time in several days. The RSI continues to show a classic positive crossover. The Nifty is expected to remain a “buy on dips” candidate as long as it holds above 24,800. On the higher side, resistance is placed at 25,250, above which the index may extend gains toward 25,500.

Key Resistance: 25,250, 25,500

Key Support: 25,000, 24,800

Strategy: Buy Nifty August 25,200 strike Call above Rs 90, with a stop-loss at Rs 64, targeting Rs 140.

Bank Nifty - Outlook and Positioning

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

Bank Nifty also opened with a gap-up on Monday, in line with broader market strength. However, it has since started to underperform the frontline Nifty, indicating a divergence in sectoral momentum. This underperformance is evident in the Bank Nifty/Nifty ratio chart, which has slipped to a 60-day low, reflecting relative weakness in banking stocks.

Technically, the index is trading below its 20-day and 50-day EMAs, suggesting short-term pressure. Moreover, the daily RSI remains in a sideways zone, indicating lack of directional strength and momentum. This setup suggests that while the broader market is gaining traction, Bank Nifty is yet to participate meaningfully in the rally and may require stronger sectoral cues to regain momentum.

Going ahead, the 56,000–56,100 zone will act as an important hurdle. Any sustainable move above 56,100 could lead to a sharp rally up to 56,500, followed by 56,900 in the short term. On the downside, 55,400–55,300 will act as crucial support for the index.

Key Resistance: 56,000, 56,100, 56,500, 56,900

Key Support: 55,400, 55,300

Strategy: Buy Bank Nifty Futures between 55,740–55,820, with a stop-loss at 55,400, targeting 56,350–56,500.

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

Bank Nifty continued to underperform relative to the Nifty, consistently facing resistance near its 21-day moving average, around the 56,000 mark. A decisive breakout above this psychological level is crucial to spark any significant short-covering rally toward the 57,000 zone. The overall structure remains sideways, with potential for a gradual upward move. Key support is seen at the 100-day moving average, placed near 55,300.

Key Resistance: 56,000, 56,400

Key Support: 55,550, 55,300

Strategy: Buy Bank Nifty Futures above 56,000, with a stop-loss at 55,650, targeting 56,800.

Rupak De, Senior Technical Analyst at LKP Securities

Bank Nifty witnessed lacklustre movement on Wednesday, staying below the 21 EMA throughout the session. Sentiment is likely to remain weak as long as the index trades below 55,800; only a decisive move above this level may attract buying interest. On the downside, support is placed at 55,500, below which Put writers may unwind their positions. A breakout above 55,800, however, could change the dynamics of Bank Nifty.

Key Resistance: 56,000, 56,500

Key Support: 55,500, 55,000

Strategy: Buy Bank Nifty August 56,000 strike Call above Rs 360, with a stop-loss at Rs 300, targeting Rs 450.

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.