The Nifty 50 as well as Bank Nifty extended their upward journey for the fifth consecutive session on December 5, with participants hoping for a dovish tone from the RBI policy on December 6. Given the strong momentum and favourable technical indicators, if the index defends 24,700, the first target is likely at 24,850, followed by 25,000 as a crucial resistance. However, 24,500 is expected to be immediate support, with 24,350 being the key support zone. The Bank Nifty may also surpass 54,000, and above it, the record high of 54,467 cannot be ruled out. On the lower side, 53,000 is the first support, followed by 52,500, according to experts.
On Thursday, December 5, the Nifty 50 jumped 241 points (1 percent) to 24,708, while the Bank Nifty rose 337 points to 53,604, with market breadth slightly in favour of the bulls. About 1,285 shares advanced against 1,185 declining shares on the NSE.
Nifty Outlook and Strategy
Ameya Ranadive, CMT, CFTe, Senior Technical Analyst at StoxBox
The Nifty, at 24,700, is exhibiting strong bullish momentum following an impressive consolidation breakout above 24,500. This breakout came after a prolonged consolidation phase within the broad range of 24,500–23,850, lasting approximately one month. Over the last two weeks, 24,300 emerged as a critical resistance level, and its breach signaled a shift in sentiment. Subsequently, the Nifty has taken support at this level, indicating a classic reversal of resistance into support. Additionally, on the hourly time frame, the Nifty is displaying a bullish Inverted Head & Shoulders pattern, which further strengthens the case for an upward movement. The breakout from this pattern sets the stage for potential upside targets of 25,500, provided that the Nifty holds above the critical support level of 24,280.
From a moving average perspective, the Nifty is comfortably trading above the 20-day, 50-day, and 100-day EMAs, reflecting a solid underlying trend and providing reliable support levels.
Key Resistance: 24,850, 25,000
Key Support: 24,500, 24,300
Strategy: The Nifty remains a "buy on dips" candidate as long as it holds above 24,500. Traders can look to accumulate near support levels for targets of 24,800–24,860. The bullish view would be negated if the price slips below 24,300, which would require a reassessment of the trend.
Chandan Taparia, Head Derivatives & Technicals, Wealth Management at Motilal Oswal Financial Services
The Nifty has crossed the resistance at the 24,650 level. Throughout the week, sustained buying was seen from lower levels. The index is taking strong support near the 24,350 zone, which is also close to its 50 DEMA (Exponential Moving Average). On the weekly chart, the Nifty has formed a bullish candle, indicating more strength towards the next resistance at the 25,000 level. Now, it must hold above the 24,650 zone for an upward move towards 24,850 and then 25,000. Immediate support is seen at 24,650 and 24,500 levels.
Key Resistance: 25,000, 25,250
Key Support: 24,500, 24,400
Strategy: Buy Nifty Futures on dips with support at 24,400 for an upside target towards 25,000 and 25,250 zones.
Hardik Matalia, Derivative Analyst at Choice Broking
A strong bullish close above the 24,700 mark indicates that buyers held the upper hand. Looking ahead, the 24,850 level is expected to act as a crucial resistance, followed by the psychological barrier at 25,000. A decisive breakout above 25,000 could lead the index toward higher levels. On the downside, 24,500 serves as immediate support, with 24,300 providing an additional safety net. In this volatile market environment, traders are advised to adopt a buy-on-dips strategy as long as the index remains above 24,200. For effective risk management, a strict stop-loss at 24,000 on a closing basis is recommended.
Key Resistance: 24,850, 25,000
Key Support: 24,500, 24,300
Strategy: Buy Nifty Futures on dips near the 24,300 level, with a stop-loss of 24,000, targeting 25,000.
Kunal Kamble, Senior Technical Research Analyst at Bonanza
The Nifty Index has given a breakout from the Inverse Head and Shoulders pattern, signaling a potential trend reversal. Additionally, the index has managed to close above the 50-day EMA, further confirming an uptrend. The momentum indicator RSI (Relative Strength Index) is trending upward, supporting the positive price movement. On the options front, the 25,000 strike Call has the highest open interest, indicating a long build-up, while on the Put side, the 24,500 strike shows the highest open interest with a short build-up. The Put-Call ratio (PCR) stands at 1.13, reinforcing a bullish bias. Considering both technical and derivative data, the index is expected to move toward the 25,000 level as long as it sustains above the 24,500 level.
Key Resistance: 25,000
Key Support: 24,500
Strategy: Buy Nifty Futures on dips with a stop-loss of 24,470, targeting 25,000.
Bank Nifty - Outlook and Positioning
Ameya Ranadive, CMT, CFTe, Senior Technical Analyst at StoxBox
The Bank Nifty at 53,550 is demonstrating significant strength after breaking out of a prolonged two-month consolidation range above 52,500. This breakout aligns with the positive momentum seen in the index’s key components, such as HDFC Bank, which itself witnessed a strong consolidation breakout, contributing to the overall bullishness of the banking sector. From a technical perspective, both the RSI and ADX (Average Directional Index) indicators have shown a positive crossover, signaling a strengthening uptrend. This confirms the robust buying interest in Bank Nifty over recent trading sessions. However, with Bank Nifty now approaching its major resistance zone of 54,000, there are indications of potential profit booking or temporary consolidation at these levels.
Key Resistance: 54,000
Key Support: 52,500
Strategy: Given the proximity to the 54,000 resistance level, traders can consider selling a 54,500 Call option (expiring December 24), currently priced at Rs 425. The target for this strategy would be Rs 200–Rs 150, while the view would be negated if the premium rises and closes above Rs 600. This approach capitalizes on the likelihood of limited upside in the near term due to the resistance zone.
Chandan Taparia, Head Derivatives & Technicals, Wealth Management at Motilal Oswal Financial Services
The Bank Nifty index has formed a strong bullish candle on the weekly time frame and has support near the 53,000 level. The index has given a breakout of a sideways consolidation and formed a bullish candle on the daily scale, forming higher highs and higher lows over the last three sessions. Now, it needs to hold above the 53,250 zone for an upward move towards 54,000, followed by the previous lifetime high of 54,467. On the downside, support shifts higher to 53,250 and then 53,000 levels.
Key Resistance: 54,000, 54,467
Key Support: 53,250, 53,000
Strategy: Buy Bank Nifty Futures on dips with support at 53,250 for an upside target towards 54,000 and 54,467 zones.
Hardik Matalia, Derivative Analyst at Choice Broking
On the daily chart, Bank Nifty formed a bullish-bodied candle with a long lower wick and a slightly higher wick, reflecting buying interest at lower levels despite intraday weakness. If the index holds above the 54,200 mark, it could indicate bullish sentiment and attract fresh buying interest toward higher levels. Additionally, the index trading above its key moving averages provides further confirmation of its upward trend. Key support levels are at 53,000 and 52,500. A breakdown below these levels could temporarily pause the bullish momentum. A sustained breakout above this level could push the index to new highs. Traders are encouraged to monitor these critical levels closely, as price movements around them will be crucial in determining the index's next directional trend.
Key Resistance: 54,000, 54,500
Key Support: 53,000, 52,500
Strategy: Buy Bank Nifty Futures on dips near the 52,500 level, with a stop-loss of 52,000, targeting 54,000–54,500 levels.
Kunal Kamble, Senior Technical Research Analyst at Bonanza
The banking index has managed to close above its 60-day breakout level for two consecutive days, indicating strength in the upward move. Additionally, the index has closed above the 50-day EMA, further supporting the bullish trend. On the momentum front, the RSI is moving higher, aligning with the positive price action. On the options front, the 52,500 strike Put holds the highest open interest, where long liquidation has been observed. On the Call side, the 54,000 strike shows the highest open interest with signs of long build-up. Considering both technical and derivative perspectives, dips should be used as buying opportunities for the Banking Index as long as it holds above the 53,000 level.
Key Resistance: 54,000
Key Support: 52,500
Strategy: Buy Bank Nifty Futures on dips with a stop-loss of 53,000 for an upmove towards 54,000 and 54,500.
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.
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