Trading Plan: Will Nifty 50, Bank Nifty build on Friday’s rally?

Nifty Trading Plan for October 3

The Nifty 50 needs to surpass and sustain above 24,900–25,000 for a further northward journey toward previous swing highs. Until then, there could be consolidation and rangebound trading with support at 24,600. As long as it stays above 24,600, a buy-on-dips strategy is advised by experts. Meanwhile, the Bank Nifty is likely to march toward the September high (55,835) as long as it stays above 54,800, the crucial support — as selling pressure may resume below this level.

On October 1, the Nifty 50 spiked 225 points (0.92 percent) to 24,836, while the Bank Nifty soared 712 points (1.3 percent) to 55,348. The market breadth was strongly in favour of the bulls, with 2,011 shares advancing against 796 declining on the NSE.

Nifty Outlook and Strategy

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

In September, the benchmark index Nifty staged a steady rally, gaining over 1,000 points during the first 15 trading sessions. However, on September 18, the index formed a Hanging Man candlestick pattern — a potential sign of trend exhaustion. This was followed by a sharp reversal, resulting in eight consecutive sessions of negative closes, effectively wiping out nearly all the gains from the first half of the month.

This sustained decline led to the emergence of a rare Japanese candlestick formation known as the Record Session Count. Typically seen near the end of a downtrend, this pattern indicates potential exhaustion in bearish momentum and hints at a possible reversal or pause in selling pressure.

Following this setup, the index witnessed a relief rally on Wednesday, breaking its eight-day losing streak. Notably, Nifty reclaimed its 100-day EMA, signalling a short-term shift in sentiment. The daily RSI also rebounded after testing the 38 level, further supporting the case for a potential recovery.

Going ahead, the 20-day EMA zone of 24,900–24,950 will act as an immediate hurdle for the index. Any sustainable move above 24,950 will lead to an extension of the pullback rally up to 25,100, followed by 25,250 in the short term. On the downside, the zone of 24,600–24,570 will act as crucial support for the index.

Key Resistance: 24,950, 25,100, 25,250

Key Support: 24,600, 24,570

Strategy: Buy Nifty Futures at around 24,930–25,000, with a stop-loss of 24,860, targeting 25,250.

Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research) at Centrum Broking

The market staged a strong comeback as the Nifty snapped its eight-day losing streak, forming a robust bullish candle on the daily chart. It took firm support at 24,600 and decisively crossed the crucial resistance at 24,800, driven by short covering. The next immediate hurdle lies at the 50-day moving average, around 24,840, followed by the psychological barrier at 25,000. The RSI has bounced back from oversold levels, indicating renewed short-term momentum.

With these technical indicators aligning positively, the uptrend is likely to extend further. As long as the Nifty holds above 24,600, a buy-on-dips strategy remains prudent. Additionally, a sharp 7 percent drop in the India VIX, closing below 10.50, signals reduced market anxiety and adds to bullish confidence.

(All spot levels)
Key Resistance: 24,941, 25,000

Key Support: 24,710, 24,600

Strategy: Buy Nifty Futures above 25,000, with a stop-loss of 24,820, targeting 25,300.

Vatsal Bhuva, Technical Analyst at LKP Securities

Nifty closed Wednesday’s session strong after the RBI policy outcome and auto sales data, reclaiming levels above its 100-day EMA at 24,750, which earlier acted as resistance. The index has also retraced 61% of the Fibonacci move between the September 1 low and September 18 high at 25,453. On the derivative front, heavy Put writing at 24,700–24,800 suggests a higher base, with maximum open interest at 25,000. Overall, sentiment has turned positive, with support at 24,700 and resistance at 25,000–25,100.

Nifty index remains mildly bullish for the short term as long as it sustains above the 24,700 level. The broader or mid-term outlook will be confirmed bullish once Nifty sustains (3–4 sessions closing above the 50-day EMA) above 24,900 levels.

Key Resistance: 24,900

Key Support: 24,600

Strategy: Buy Nifty October Futures at 24,982–24,950, with a stop-loss of 24,850, targeting 25,150.

Bank Nifty - Outlook and Positioning

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

Bank Nifty outperformed the broader market on Wednesday, closing above the 55,300 mark with a robust gain of 1.30 percent. The index formed a sizeable bullish candle on the daily chart, reflecting strong buying interest. The ratio chart of Bank Nifty versus Nifty has reached a 28-session high and continues to mark higher highs, underscoring the relative strength and outperformance of the banking index.

Technically, Bank Nifty has surged past its 20-day, 50-day, and 100-day EMA levels, reinforcing the bullish momentum. Additionally, the daily RSI has rebounded after testing a low of 40.92, indicating a recovery in underlying strength.

Going ahead, considering the current chart structure, the index is likely to continue its upward rally and test the level of 55,800, followed by 56,300 in the short term. On the downside, the 20-day EMA zone of 54,950–54,900 will act as important support for the index.

Key Resistance: 55,800, 56,300

Key Support: 54,950, 54,900

Strategy: Buy Bank Nifty Futures at around 55,580–55,680, with a stop-loss of 55,300, targeting 56,100–56,250.

Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research) at Centrum Broking

Bank Nifty has been displaying relative strength compared to the Nifty index over the past few sessions and has successfully reclaimed both its 21-day and 50-day moving averages. On the daily chart, it is forming an inverse Head and Shoulders pattern, with the neckline placed around 55,700, which also aligns with the 100-day moving average. A breakout above this zone could trigger a further rally towards the 56,500 mark. On the downside, immediate support is placed near 54,800. Considering the recent strong momentum, a buy-on-dips strategy remains favourable, and Bank Nifty is likely to continue outperforming the Nifty in the near term.

(All spot levels)
Key Resistance: 55,700, 56,200

Key Support: 54,800, 54,200

Strategy: Buy Bank Nifty Futures in the range 55,500–55,600, with a stop-loss of 55,200, targeting 56,200/56,500.

Vatsal Bhuva, Technical Analyst at LKP Securities

Bank Nifty delivered a strong and confident closing, reclaiming both its 20-day and 50-day EMAs. The index took support near its 61% Fibonacci retracement after a rally and correction, and in Wednesday’s session, it reclaimed the 38% Fibonacci level with a bullish candlestick. RSI confirmed strength with a bullish crossover, supporting momentum. With resistance at 55,800 and support at 55,000, sustaining above 54,800 keeps the short- to mid-term outlook positive, signalling continued bullish sentiment in the index.

The highest Put writing was observed at the 55,000 strike price, suggesting support formation, while the outstanding highest Call writing at the 56,000 strike price indicates resistance. Put writing at lower strike prices reflects a bullish sentiment in the market.

The short-term and mid-term outlooks remain bullish as long as the index sustains above 54,800 levels.

Key Resistance: 55,800

Key Support: 55,000, 54,800

Strategy: Buy Bank Nifty October 56,000 strike Call at Rs 470–440, with a stop-loss of Rs 370, targeting Rs 650.

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.