Trading Plan: Can Nifty, Bank Nifty manage to defend Friday’s low?

Nifty Trading Plan for August 25

The Nifty 50 corrected sharply on August 22 and returned to Monday’s low (just above 24,850), which is expected to act as immediate support for the index. If the index decisively falls below this level, 24,700 could be the next downside target. On the higher side, 25,000 is expected to be immediate resistance. A move above this level could lead to a test of last week’s high of 25,150. Meanwhile, if the Bank Nifty fails to defend the 55,000–54,900 zone (which includes the 100-day EMA and August low), the bears may step in aggressively. However, sustaining above this range can open the door to 55,500, followed by the 55,700–55,800 zone, according to experts.

On August 22, the Nifty 50 dropped 214 points (0.85 percent) to 24,870, while the Bank Nifty corrected 606 points (1.09 percent) to 55,149. The market breadth favoured the bears, with 1,704 shares declining compared to 1,025 advancing on the NSE.

Nifty Outlook and Strategy

Rajesh Bhosale, Technical Analyst at Angel One

The week ended on a mixed note, as Nifty failed to cross the golden retracement at 25,150 (61.8% retracement of the fall from 25,700), triggering profit booking on Friday. On the positive side, the index managed to close above its short-term moving averages — the 20 and 50 DEMA — which had previously acted as hurdles during every bounce.

On the indicator front, the RSI Smoothened has moved swiftly from 26 last week to 56 this week. This sharp upturn in momentum bodes well for the bulls.

From a technical standpoint, Friday’s correction looks more like a retest of the bullish gap — a mean-reverting tendency often seen before a larger move resumes. In this scenario, the gap zone around 24,750, followed by 24,650 (coinciding with the 89 DEMA), will act as crucial support. If breached, the bullish rationale could fizzle out, opening the door for a retest of recent lows around 24,350.

On the flip side, reclaiming 25,000, followed by a sustained move above 25,150, would be the key trigger for bulls to regain control.

Key Resistance: 25,000, 25,080

Key Support: 24,750, 24,650

Strategy: Buy Nifty Futures on dips around 24,750, with a stop-loss at 24,650, targeting 25,100–25,150.

Rajesh Palviya, Senior Vice President Research (Head Technical Derivatives) at Axis Securities

Nifty closed the week with 239 points gains. On the weekly chart, the index formed a small bearish candle with a long upper shadow, indicating selling pressure near the 61.8% Fibonacci retracement level of the decline from 25,669 to 24,337, placed at 25,160.

Although the index has broken above the falling channel, resistance at 25,250 remains crucial — only a decisive close above this level may trigger further upside movement.

On the downside, the bullish gap zone between 24,853 and 24,674, along with the 20-day SMA near 24,740, is expected to act as key support. If Nifty stays above 25,000, it may rise towards 25,250 to 25,500; however, if it falls below 24,800, the downside could extend to 24,650 to 24,500.

For the upcoming week, we anticipate Nifty to trade within the range of 25,500 to 24,500, with a mixed bias. Importantly, the weekly RSI has turned positive and is holding above its reference lines, signaling an underlying positive sentiment.

Key Resistance: 25,000, 25,200

Key Support: 24,800, 24,700

Strategy: Buy Nifty Futures around 24,800, with a stop-loss at 24,700, targeting 25,000–25,100.

Anshul Jain, Head of Research at Lakshmishree Investments

After a gap-up start on Monday, Nifty ended the week at its lows, forming a shooting star candle — a classic sign of a short-term top. The index has also retraced 50% of the entire fall from 25,689 to 24,337.5, with the retracement level at 25,012, adding to the resistance.

Confirmation of this short-term top will come only if Nifty closes the week below the prior low of 24,852.85. On the flip side, a quick sweep of 24,850 could trap bears and trigger sharp short covering, propelling the index towards 25,246. This level also coincides with the last weekly swing high before the sell-off, making it a decisive resistance.

The coming week hinges on 24,850 — a breakdown confirms weakness, while a sweep may fuel an aggressive bounce.

Key Resistance: 25,000, 25,144, 25,246

Key Support: 24,850, 24,702

Strategy: Sell on rallies towards 25,000–25,144 for an immediate downside target of 24,702.

Bank Nifty - Outlook and Positioning

Rajesh Bhosale, Technical Analyst at Angel One

The technical structure of the rate-sensitive index paints a grim picture, with buyers failing to capitalize on the early-week advantage provided by the notable bullish gap-up opening. With the last session’s decline, prices have slipped back inside the prior week’s range — signaling a failed breakout and raising the possibility of an immediate retest of recent swing lows in the 55,000–54,900 band.

Another significant development is the 20 EMA crossing below the 50 EMA for the first time since April this year, suggesting a shift in the intermediate trend from up to down.

While the immediate objective appears to be a retest of recent swing lows, a convincing break below them would decisively tilt the technical structure in favour of sellers, confirming a lower-high, lower-low formation and thereby establishing a downward trend.

Given this evolving bearish outlook, participants are advised to avoid aggressive long positions — particularly overnight — and instead adopt a sell-on-rise strategy.

In terms of levels, immediate support lies in the 55,000–54,900 band, with stronger support in the 54,400–54,000 zone. On the flip side, resistance is likely at 55,600–55,500, followed by a stronger hurdle around this week’s highs in the 56,060–56,200 zone.

Key Resistance: 55,400, 55,600

Key Support: 55,000, 54,800

Strategy: Sell Bank Nifty Futures on bounce around 55,500, with a stop-loss at 55,800, targeting 54,800.

Rajesh Palviya, Senior Vice President Research (Head Technical Derivatives) at Axis Securities

Bank Nifty closed the last week lower by 192 points. On the weekly chart, the index formed a long bearish candle with a lower high and low formation, closing below the previous week’s low — clearly indicating weakness.

Additionally, it closed below the 20-week Simple Moving Average (SMA) set at 55,434 and encountered resistance at the upper band of the falling channel, further reinforcing bearish sentiment.

The chart setup suggests that a sustained move above 55,650 could trigger buying interest towards levels of 56,000 to 56,350, while a break below 55,000 may accelerate selling towards 54,500 to 54,000.

For the upcoming week, we anticipate that Bank Nifty will trade within a broad range of 56,350 to 54,000, maintaining a negative bias. The weekly RSI remains in negative territory, confirming weak momentum.

Key Resistance: 55,400, 55,650

Key Support: 55,000, 54,800

Strategy: Sell Bank Nifty Futures around 55,500, with a stop-loss at 55,700, targeting 55,200–55,000.

Anshul Jain, Head of Research at Lakshmishree Investments

Bank Nifty ended the week with a bearish Marubozu candle, showing strong downside pressure. The small upper wick can be ignored, as the structure remains clearly negative.

For the past three weeks, the index has managed to hold the 21-week moving average around 54,900, with the broader support zone between 54,900–55,100 being defended by bulls.

A decisive breach below 54,900 will likely trigger a deeper sell-off, exposing the 50-week moving average and the yearly moving average cluster at 53,100–52,800 — a crucial downside zone.

On the upside, rallies towards 55,600–56,000 are expected to face heavy supply, keeping the short-term bias bearish. Only a sustained move above 56,200 would force sharp short covering and shift momentum.

For now, 54,900 remains the line in the sand for bulls.

Key Resistance: 55,600, 56,100

Key Support: 55,100, 54,900

Strategy: Sell on rallies towards 55,600–56,100 for an immediate downside target of 54,900. A breach of 54,900 should lead to adding shorts for a target of 54,000.

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