Trading Plan: Can Nifty defend 23,500, Bank Nifty stay above 49,650 on closing basis?

Nifty Trading Plan

The Nifty 50 recovered sharply from the day's low before closing flat with a moderate loss, but the Bank Nifty saw continued selling pressure, finishing near a five-month low on January 8. The Nifty 50 smartly defended the 23,500 level, which is expected to act as support in the upcoming sessions. As long as the index holds above this level, an upside bounce toward 24,000 is possible; until then, consolidation may continue. For the Bank Nifty, the selling pressure could intensify if the index decisively closes below 49,650 (the August low). Until then, this level may act as support, while the 50,500–50,700 zone is likely to be a key resistance area, experts suggest.

On Wednesday, January 8, the Nifty 50 dropped by 19 points to close at 23,689, while the Bank Nifty finished at 49,835, down by 367 points, with a negative market breadth. A total of 1,719 shares saw a correction, while 792 shares rose on the NSE.

Nifty Outlook and Strategy

Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan

On the daily charts, the Nifty has tested the 23,500–23,550 support zone and witnessed a sharp pullback. As long as this zone holds, there is a high probability of a pullback towards 24,000, which coincides with the 20-day moving average. Both the daily and hourly momentum indicators show a positive crossover, signaling a buy. Therefore, a counter-trend pullback is expected.

Key Resistance: 24,000, 24,090

Key Support: 23,550, 23,500

Strategy: Buy Nifty Futures with a stop-loss of 23,560, targeting 23,825–23,900.

Vidnyan S Sawant, Head of Research at GEPL Capital

The Nifty index has exhibited significant volatility in recent days but remains near its 200-day SMA, currently positioned around the 23,900 level. On the weekly charts, the index formed a Spinning Top candlestick pattern last week, followed by an Inside Bar candle pattern this week. Thus far, it has held above its recent low of 23,460. However, a breakdown below this level could lead to further declines towards 23,260, and eventually 22,800 in the near term. On the upside, the index faces strong resistance at 23,925, with the next hurdle at 24,250. Additionally, the RSI (Relative Strength Index) indicator hovering near the 40 mark signals continued weakness in momentum.

Key Resistance: 23,925, 24,250

Key Support: 23,460, 22,800

Strategy: Sell Nifty Futures below 23,460 with a stop-loss of 23,700, targeting 22,800.

Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities

The Nifty index has been witnessing highly volatile moves recently. In yesterday’s session, however, we saw the market recover sharply from the lows due to short covering. The short-term trend for Nifty remains weak, but the smart upside recovery from around the 23,500 level indicates the possibility of an upside bounce in the coming sessions. A sustainable move above the 23,800 level on broader charts could confirm an upside bounce in the market. Immediate support is placed at 23,500. We expect the market to remain volatile and trade within the broader range of 23,500–23,900.

Key Resistance: 23,800, 23,900

Key Support: 23,600, 23,500

Strategy: Buy Nifty Futures on dips near 23,700, with a stop-loss below 23,500, targeting 24,000.

Bank Nifty - Outlook and Positioning

Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan

The Bank Nifty has found buying interest in the 49,400–49,350 zone, which coincides with the lower end of the reverse channel and the weekly lower Bollinger band. Additionally, we can observe a positive divergence on the hourly momentum indicator, suggesting a reduction in selling pressure. Therefore, a counter-trend pullback is likely over the next few trading sessions.

Key Resistance: 51,100, 51,640

Key Support: 49,400, 49,300

Strategy: Buy Bank Nifty Futures with a stop-loss of 49,550, targeting 51,100–51,640.

Vidnyan S Sawant, Head of Research at GEPL Capital

The Bank Nifty continues to exhibit a lower-top, lower-bottom formation, hitting near its seven-month low intraday, signaling weakness in the index. On the daily charts, it remains below its 200-day SMA, currently positioned at 50,722. The RSI momentum indicator has shifted below 40, indicating strengthening bearish momentum. A decisive close below the 49,600 level could trigger further downside, with potential targets at 48,000 and 46,400 in the near term.

Key Resistance: 50,700, 52,000

Key Support: 49,600, 48,000

Strategy: Sell Bank Nifty Futures below 49,600 with a stop-loss of 50,700, targeting 48,000.

Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities

The Bank Nifty remains well below its 200-day EMA on daily charts. The index has now entered its second week of correction and has breached its major support at 50,700. We expect the index to remain under pressure and gradually move toward the 49,000 levels on a short-term basis. Technically, the selling pressure will remain intact in the index as long as it stays below the 50,800 mark. Any technical bounce should be used to create fresh short positions for now.

Key Resistance: 50,500, 50,700

Key Support: 49,800, 49,500

Strategy: Sell Bank Nifty Futures on a rise near 50,400, with a stop-loss above 50,700, targeting 49,900.