Trading Plan: Will Nifty 50, Bank Nifty extend northward journey for third consecutive session?

Trading Plan for Nifty, Bank Nifty

The Nifty 50 and Bank Nifty extended their gains and continued with the higher highs–higher lows formation for another session on May 26. The mood remains positive on Dalal Street; however, any near-term consolidation could make the market healthier. According to experts, the Nifty 50 may march toward 25,300 in the short term if it holds 24,800 as support. However, if the index slips below 24,800, bears may become active. Meanwhile, if the Bank Nifty defends the 55,000 level in upcoming sessions, the 55,800–56,100 zone can't be ruled out. That said, selling pressure may emerge if the index breaks below 55,000.

On May 26, the Nifty 50 jumped 148 points (0.60 percent) to close at 25,001, while the Bank Nifty rose 174 points to end at 55,572. Market breadth remained in favour of the bulls, with around 1,604 stocks advancing against 1,000 declining shares on the NSE.

Nifty Outlook and Strategy

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

The Nifty couldn’t convincingly close above the 25,000 mark once again. While the index continues forming new swing highs, overall FII participation has declined—evidenced by heavier selling on down days compared to buying on up days. India VIX has also been rising over the past few sessions; yet, the index has moved higher—an unusual occurrence, as VIX and Nifty typically move in opposite directions. This implies that either VIX or the Nifty may reverse course soon.

The PCR (Put-Call Ratio) was well above 1 earlier, giving Put writers the upper hand, with strong buildup at the 25,000 strike. However, by the end of the day, 25,000 Call writers took control, and the PCR settled slightly above 1, at 1.01. Based on these observations, going long is advisable only on a breakout above the previous swing high.

Key Resistance: 25,150, 25,300

Key Support: 24,800, 24,500

Strategy: Buy Nifty Futures above 25,150, with a stop-loss at 24,900, targeting 25,500.

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

On May 26, once again, the rally stalled near the psychological 25,000 mark—keeping the broader trend within a consolidation-correction phase. Despite the bounce, the index remains below the 25,300 hurdle, which aligns with the 161.8 percent Fibonacci extension and acts as a strong supply zone.

The daily RSI remains below its previous peak, highlighting a bearish divergence and weakening momentum. Price action is still far from the Golden Crossover zone near 23,800–23,500, suggesting a possible mean reversion. The Camarilla pivot band of 25,000–25,100 will be crucial for trend validation, with 25,300 serving as a structural ceiling for now.

Key Resistance: 25,100, 25,300

Key Support: 24,800, 24,600

Strategy: Sell Nifty Futures in the 25,000–25,100 zone, with a stop-loss at 25,300, targeting 24,600.

Vidnyan S Sawant, Head of Research at GEPL Capital

Nifty recently broke out above the 24,850 level on the weekly charts and has been forming inside candles over the past few weeks—signaling healthy consolidation following the breakout. This pattern suggests strength and potential trend continuation. On the daily charts, the index is trading near the upper Bollinger Band while consistently finding support at the middle band, indicating sustained bullish momentum. The RSI also remains above 60 across timeframes and is gradually rising, reinforcing positive sentiment and underlying strength.

Key Resistance: 25,250, 25,800

Key Support: 24,350, 24,000

Strategy: Buy Nifty at current market price for targets of 25,250 and 25,800, with a stop-loss at 24,700.

Bank Nifty - Outlook and Positioning

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

The Bank Nifty managed to break above the 55,500 and 55,800 levels but couldn’t sustain above the previous swing high, facing strong resistance near 56,000. The 56,000 strike has the highest Call open interest, making it an immediate resistance level. Above that, 57,000 becomes the next key level. On the downside, 55,000 is a crucial support zone, backed by an uptrend line and the second-highest Put open interest.

The PCR has slipped below 1 to 0.85, suggesting that bears now have a short-term edge—unless the index decisively crosses 56,000. The Nifty Private Bank Index, which carries the highest weight in the Bank Nifty, is also in a consolidation phase. Hence, Bank Nifty should be bought only on a breakout above 56,000.

Key Resistance: 56,000, 57,000

Key Support: 55,000, 54,000

Strategy: Buy Bank Nifty Futures above 56,000, with a stop-loss at 54,900, targeting 57,000 and 57,500.

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

While intraday momentum remained strong, a decisive close above 55,700 is still needed to confirm bullish continuation. Until then, Bank Nifty remains at a critical inflection point. The 55,300–55,530 Camarilla pivot band will be key to determining near-term direction. A dip below this band may invite fresh selling.

Key Resistance: 55,700, 56,200

Key Support: 55,300, 54,800

Strategy: Sell Bank Nifty Futures in the 55,700–55,800 zone, with a stop-loss at 56,200, targeting 55,000.

Vidnyan S Sawant, Head of Research at GEPL Capital

Last week, Bank Nifty formed a neutral candlestick pattern following a Bullish Sash formation and ended on a positive note, reaffirming its bullish bias. Notably, the recent pullback did not see follow-through selling after a large bearish candle near record highs—signaling strong buying interest and market confidence. Furthermore, the RSI continues to hold above 60, reinforcing the ongoing positive momentum.

Key Resistance: 56,100, 57,500

Key Support: 55,000, 54,400

Strategy: Buy Bank Nifty Futures at the current market price for targets of 56,100 and 57,500, with a stop-loss at 55,000.

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.