Trading Plan: Will Nifty 50, Bank Nifty be able to climb towards record high?

Nifty has been consolidating in a range of 23,200 to 23,700 levels for the last 10 trading sessions. Only a break above or below this range can help it establish a further trend; otherwise, it will trade within this range until June 27. The momentum indicator MACD (Moving Average Convergence Divergence) is well into buy mode on the daily as well as weekly time frames, which is positive in the short term. The hourly momentum is also reversing from the zero-reference line, which is positive going forward. Nifty has provided a breakout from the upward-sloping parallel channel and, until it doesn’t break 23,200 levels, the overall trend is up.

Regarding derivatives data, the Nifty PCR (Put Call Ratio) has moved back above 1, now at 1.04, making it slightly bullish to neutral. It is above its maximum pain and modified maximum pain levels of 23,400 and 23,526, respectively, making these levels crucial support in the near term. There has been good addition on the Put side from 23,500 to 23,300 strikes, with significant addition at the 23,000 Put strike, whereas the 23,700 to 23,900 strikes have some Call side additions, and significant addition was seen on the 24,000 Call strike. It seems the range is 23,700-23,300, and a breakout from this range will help the index move further directionally.

Key Resistance: 23,700

Key Support: 23,300

Strategy: Buy on dips near 23,400, with a stop-loss at 23,200 and a target of 23,700, 23,900.

Mehul Kothari, DVP – Technical Research at Anand Rathi

We are witnessing index management at its peak. Since the big green candle on June 7, the Nifty 50 has been inching higher gradually but closing in red (close is lower than open). We observe nine consecutive red candles, most of which are indecisive. This might not bode well for the markets in the coming sessions. There was a breakout from the rising channel, and hence the trendline of the channel would be a crucial support in the coming week. That support is around 23,300, and a close below the same would confirm a breakout failure. In that case, we might witness serious profit booking in markets. Traders are advised to follow a strict stop loss of 23,300 for their long positions. On the upside, the gradual rise would continue above the 23,700 mark, but that seems unlikely as of now.

Key Resistance: 23,600, 23,700

Key Support: 23,300

Strategy: Sell Nifty or buy Put below 23,500, with a stop-loss at 23,600 and a target of 23,300.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

The Nifty is trading volatile with a positive bias, where 23,200 is an immediate and important support level. Below 23,200, we can expect some profit booking towards the 20-DMA of 23,000. On the upside, 23,665 and 23,800 are resistance levels.

Key Resistance: 23,665, 23,800, 24,000

Key Support: 23,200, 23,000, 22,800

Strategy: Consider buying on dips near 23,200, with a stop-loss at 23,000, and a target of 23,800.

Bank Nifty - Outlook and Positioning

Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities

Bank Nifty has been consolidating within a range of 52,000 to 51,000 since its last weekly expiry. It has formed a symmetrical triangular pattern which is likely to break out on the upside. The private sector banks are well in the uptrend in the short term, which should help the Index move higher. The momentum indicator MACD is in buy mode on the daily and weekly charts, though in sell mode on the hourly charts, suggesting some further consolidation until it moves beyond 52,000 levels.

Regarding derivatives data, the PCR is well above 1, at 1.22, indicating that the bulls have an upper hand. The maximum pain is at 51,500 and modified maximum pain is at 51,887. Hence, the Index is trading within this range of 51,500 to 51,887, and a breakout from this range will bring a further directional move. There are significant Put additions from 52,000 to 51,000 strikes, whereas minor Call additions are seen from 52,100 to 53,000 levels. However, if 52,000 is taken off with a gap up, further short covering until 52,500 levels can be expected.

Key Resistance: 52,000

Key Support: 51,500, 51,000

Strategy: Buy near 51,700 and 51,500, with a stop-loss at 51,000 and a target of 52,000 and 52,500.

Mehul Kothari, DVP – Technical Research at Anand Rathi

We witnessed a much-awaited short covering in Bank Nifty during the previous week. The index outperformed the benchmarks and rallied over 3 percent to almost test the 52,000 mark. Technically, the index has broken out from the rising trendline resistance, and a breach of the 51,000 mark on a closing basis would confirm a failure of the same. The upside hurdle is at 52,000, and below the 51,000 level, we might observe profit booking in banking stocks too.

Key Resistance: 51,800, 52,000

Key Support: 51,600, 51,000

Strategy: Sell below 51,600 for a 51,100 target, with a stop-loss of 51,800.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

Bank Nifty is showing strong momentum; however, 52,000 is a trendline resistance. 51,000 is an immediate support level; below this, 50,250 will be the next support level. On the upper side, 52,000, 52,600, and 53,000 are resistance levels.

Key Resistance: 52,000, 52,600, 53,000

Key Support: 51,000, 50,250

Strategy: Consider buying on dips near 51,000, with a stop-loss at 50,250 and a target of 53,000.

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