Trading Plan: Can upward journey extend in Nifty 50, Bank Nifty for a fourth consecutive session?

Nifty Trading Plan for February 5

• Experts advise buy-on-dips strategy
• Nifty to move toward 25,800, 26,000 soon; support is placed at 25,500
• Bank Nifty needs to surpass and sustain above 60,400–60,500 for sharp upmove

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The Nifty 50 and Bank Nifty managed to hold above Tuesday’s low levels, with further improvement in momentum indicators and a consistent fall in the VIX. As long as these indices hold above the midline of the Bollinger Bands (20 DMA), the trend remains in favour of the bulls, with a continuation of the buy-on-dips strategy, experts said. The Nifty is expected to move toward 25,800 and then 26,000 soon, while 25,500 is expected to be a crucial support. Meanwhile, the Bank Nifty needs to surpass and sustain above the 60,400–60,500 zone for a sharp upmove toward 61,000. Until then, range-bound trading may be seen, with support at 59,800.

On February 4, the Nifty 50 rose 48 points (0.2 percent) to 25,776, while the Bank Nifty jumped 197 points (0.33 percent) to 60,238. Market breadth remained healthy, with a total of 2,012 shares rising against 911 declining shares on the NSE.

Nifty Outlook and Strategy

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

On Wednesday, the Nifty once again found support near its 100-day EMA, reinforcing this level as a reliable short-term demand zone. The index later witnessed a steady intraday pullback and is currently trading above its key short-term and long-term moving averages, indicating underlying structural strength. However, momentum indicators are signalling a period of sideways consolidation, suggesting that the index may continue to oscillate within a defined band before attempting a directional breakout.

Going ahead, the 100-day EMA zone of 25,580–25,550 is expected to act as immediate support, and holding above this band will be crucial for sustaining any bullish sentiment. On the upside, the region between 25,850–25,880 will serve as a critical resistance zone. A sustained move above 25,880 could open the gates for a further upside towards 26,000, followed by 26,200 in the near term, setting the stage for another potential attempt at reclaiming higher levels.

Key Resistance: 25,850, 25,880, 26,000

Key Support: 25,580, 25,550

Strategy: Buy Nifty Futures at around 25,760–25,860, with a stop-loss of 25,640, targeting 26,080.

Nilesh Jain, VP- Equity Technical & Derivative Research at Centrum Broking

The Nifty index extended its upward momentum for the third consecutive session and closed above its immediate support at the 100-DMA, placed near 25,640. However, the index encountered strong resistance around the 50-DMA at 25,818, which continues to act as a key hurdle. A decisive breakout above this level could open the door for an upside move towards the 26,200 zone in the near term.

On the momentum indicators front, the MACD has given a fresh buy crossover, while the RSI has rebounded from the oversold territory and moved above the 50 mark, indicating improving underlying strength. Meanwhile, the India VIX cooled off towards the 12.50 level. A further decline in volatility would be supportive of sustained positive sentiment.

Considering the overall technical setup, a breakout above 25,900 in Nifty Futures may trigger short covering, potentially leading to a rally towards 26,200 levels. Therefore, initiating long positions in Nifty Futures on a decisive breakout above 25,900 is advisable.

(Spot levels)

Key Resistance: 26,000, 26,200

Key Support: 25,650, 25,560

Strategy: Buy Nifty Futures above 25,900, with a stop-loss of 25,750, targeting 26,200.

Rupak De, Senior Technical Analyst at LKP Securities

The Nifty remained largely sideways but managed to sustain above the 200-hour SMA, confirming a positive short-term trend. Additionally, the index closed above the 50 EMA for the second consecutive session, while comfortably holding above the 200 DMA.

The daily RSI has formed a bullish crossover, indicating improving momentum. Following the tariff-relief-led rally on Tuesday, market sentiment appears to have shifted from “sell on rises” to “buy on dips.” On the downside, immediate support is placed at 25,500, while on the upside, resistance is seen in the 25,875–26,000 zone.

Key Resistance: 25,875, 26,000

Key Support: 25,500

Strategy: Buy Nifty 25,800 CE of February 10 expiry at Rs 145, with a stop-loss of Rs 119, targeting Rs 200.

Bank Nifty - Outlook and Positioning

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

The banking benchmark Bank Nifty registered a fresh all-time high on Tuesday, reflecting strong upward momentum in the sector. However, the index soon encountered sharp profit booking. Despite this pullback, Bank Nifty continues to trade comfortably above its key moving averages, highlighting underlying strength in the broader trend. At the same time, momentum indicators are signalling a phase of sideways movement, suggesting consolidation before the next directional move.

Looking ahead, the zone of 59,900–59,800 will act as a crucial support area, where buyers are likely to step in if the index dips. On the upside, the region between 60,500–60,600 remains the immediate resistance zone. A convincing breakout above this band could revive bullish momentum, paving the way for the index to resume its upward trajectory.

Key Resistance: 60,500, 60,600

Key Support: 59,900, 59,800

Strategy: Buy Bank Nifty Futures at around 60,250–60,400, with a stop-loss of 59,800, targeting 61,400.

Nilesh Jain, VP- Equity Technical & Derivative Research at Centrum Broking

Bank Nifty continued its upward momentum for the third consecutive session, in line with the Nifty, and successfully defended the 60,000 mark on a closing basis despite intraday volatility. The index has scaled to a fresh record high this week, reflecting strong underlying strength. It continues to trade comfortably above all its short-term as well as long-term moving averages, reinforcing the positive trend.

On the momentum front, the RSI has negated the earlier bearish formation of lower tops and lower bottoms and has moved above the 55 level, which further supports the bullish setup.

Overall, the structure of Bank Nifty appears relatively stronger compared to the Nifty, and a buy-on-dips strategy remains advisable. Considering the current technical setup, traders may look to initiate long positions in Bank Nifty Futures in the 60,300–60,400 range, with a stop-loss placed below 59,850. A pullback-driven rally towards fresh record highs around 61,300 cannot be ruled out in the near term.

(Spot levels)

Key Resistance: 60,600, 61,300

Key Support: 59,850, 59,500

Strategy: Buy Bank Nifty Futures in the range of 60,300–60,400, with a stop-loss of 59,850, targeting 61,300.

Rupak De, Senior Technical Analyst at LKP Securities

Bank Nifty registered a downward consolidation breakout on Tuesday, indicating a potential resumption of directional momentum. During the latest trading session, the index traded within a range of 59,891 to 60,389, reflecting controlled price action after the breakout. The near-term sentiment remains constructive, as the index has managed to close above its 20-day moving average, suggesting underlying strength.

The RSI continues to hold in a bullish crossover, signalling improving momentum. As long as Bank Nifty sustains above the immediate support zone, the index is likely to maintain a positive bias with gradual upside potential. However, a decisive breach below 59,500 may weaken the ongoing momentum and could trigger short-term profit booking.

Key Resistance: 60,500, 61,000

Key Support: 59,500

Strategy: Buy Bank Nifty 60,500 CE of February expiry at Rs 630, with a stop-loss of Rs 500, targeting Rs 780.