Trading Plan: Will Nifty 50, Bank Nifty consolidate after the sharp rally?

Nifty Trading Plan

The Nifty 50 and Bank Nifty recorded outstanding performances on May 12, following the ceasefire between India and Pakistan, and the progress in US-China trade deal. Technical indicators and chart patterns signal a strong upward journey ahead, despite the possibility of intermittent consolidation. The Nifty 50 may find support at 24,600 in case of a pullback; however, resistance is placed in the 25,200–25,300 zone in the short term. The Bank Nifty needs to clear the hurdle of 55,700 and 56,100 (record high) for a further sharp upmove. Until then, consolidation cannot be ruled out, with support seen at 54,900, according to experts.

On Monday, May 12, the Nifty 50 surged 917 points (3.82 percent - the biggest single-day rally since February 2021) to close at 24,925, while the Bank Nifty jumped 1,788 points (3.34 percent) to 55,383, supported by strong market breadth. A total of 2,414 equity shares advanced compared to 239 declining shares on the NSE.

Nifty Outlook and Strategy

Jigar S Patel, Senior Manager - Equity Research at Anand Rathi

The Nifty 50 broke past key resistance at 24,200 through a gap-up and maintained upward momentum, clearing subsequent resistances at 24,600 and 24,800. Looking ahead to May 13, the 25,080–24,770 range will be crucial in determining the market’s near-term direction. On the technical front, immediate resistance lies at 25,100, where profit booking could emerge, while 24,800 remains a vital support zone to monitor for potential reversals.

Key Resistance: 25,100, 25,300

Key Support: 24,800, 24,600

Strategy: Sell Nifty Futures in the 25,200–25,250 zone, with a stop-loss at 25,400, targeting 24,875.

Vidnyan S Sawant, Head of Research at GEPL Capital

The Nifty 50 has formed a Bullish Kicker candlestick pattern on the weekly chart, highlighting a firm bullish undertone. A Change in Polarity (CIP) has been observed around the 24,000 level, now acting as a key support zone. Adding further strength to the bullish outlook, the index recently witnessed a Golden Crossover, affirming a sustained upward trend. Moreover, the RSI (Relative Strength Index) remains above 60 across all timeframes and continues to trend higher, reinforcing strong positive momentum in the market.

Key Resistance: 25,250, 25,800

Key Support: 24,350, 24,000

Strategy: Buy Nifty Futures at current market price (CMP), with a stop-loss at 24,500, targeting 25,250 and 25,800.

Riyank Arora, Technical Analyst at Mehta Equities

The Nifty has broken out above the 24,800–24,850 zone and formed a strong bullish candlestick pattern on the daily timeframe. RSI (14) on the daily chart now stands at 67, indicating strong momentum. ROC (Rate of Change) has bounced from its median line (0.00) and touched 2.45, suggesting a sharp surge in momentum. The market is expected to eventually move toward the 25,200–25,300 levels. 24,700 serves as immediate support and will be crucial during any pullback.

Key Resistance: 25,200

Key Support: 24,700

Strategy: Buy Nifty May Futures on any pullback toward 24,900–24,950, with a stop-loss at 24,750, targeting 25,200–25,300.

Bank Nifty - Outlook and Positioning

Jigar S Patel, Senior Manager - Equity Research at Anand Rathi

The Bank Nifty broke past key resistance at 54,150 through a gap-up and continued its upward momentum, clearing subsequent resistances at 55,000 and 55,200. Technically, immediate resistance lies at 55,650, where profit booking could occur, while 55,000 remains a vital support zone for potential reversals. For May 13, the 55,150–55,650 range will be crucial in determining the index’s near-term direction.

Key Resistance; 55,650, 56,000

Key Support: 55,000, 54,700

Strategy: Sell Bank Nifty Futures in the 56,000–55,900 zone, with a stop-loss at 56,350, targeting 55,100.

Vidnyan S Sawant, Head of Research at GEPL Capital

After reaching the milestone of 56,098, the Bank Nifty has entered a phase of sideways consolidation at higher levels, reflecting strength and stability following a sharp rally. This week, the index began on a strong note and is currently forming a Bull Sash candlestick pattern. Importantly, it has closed above the previous week’s high, reinforcing the bullish undertone. A Change in Polarity (CIP) has also been observed near a key support zone on the daily chart, offering further confirmation of strength. Additionally, the RSI continues to hold above the 60 mark, indicating sustained positive momentum.

Key Resistance: 56,100, 57,500

Key Support: 54,550, 53,400

Strategy: Buy Bank Nifty Futures at current market price, with a stop-loss at 54,550, targeting 56,100 and 57,500.

Riyank Arora, Technical Analyst at Mehta Equities

Bank Nifty broke above its immediate resistance at 55,000 with a sharp surge in volumes. The overhead trendline resistance now lies in the 55,600–55,700 zone, from where some profit booking may emerge. Immediate support is placed at 54,900—a break below this level could trigger further selling. RSI (14) at 62 signals strong momentum in the overall banking sector, and the rally is expected to extend further.

Key Resistance: 56,100

Key Support: 54,900

Strategy: Buy Bank Nifty May Futures at 55,600 and 55,400, with a stop-loss at 55,000, targeting 55,900 and 56,100.