The Nifty 50 closed higher for another session amid rangebound trading and snapped a six-week losing streak on August 14 but still traded well below the 20- and 50-day EMAs (24,750–24,800), which are crucial for further upward journey. Until then, the consolidation may continue with support at 24,500–24,450, followed by 24,300. Meanwhile, the Bank Nifty finished higher after two-week losses but remained in previous week's range. It needs to give a strong breakout above 55,650 for further upmove toward 55,800–55,900 (around the 20- and 50-day EMAs). Until then, 54,950 (100-day EMA) can act as a good support, according to experts.
On August 14, the Nifty 50 rose 12 points to 24,631, and the Bank Nifty climbed 160 points to 55,342, taking total last week’s gains to 1.1 percent and 0.6 percent, respectively. The market breadth was weak, with about 1,752 shares declining compared to 1,128 shares that advanced on the NSE.
Nifty Outlook and Strategy
Osho Krishan, Chief Manager - Technical & Derivative Research at Angel One
By the end of last week, the benchmark index Nifty recovered by over one percent, reclaiming 24,600 on a weekly basis and indicating initial positive momentum. From a technical perspective, the index has successfully reclaimed the 100-DEMA and has halted its losing streak.
At the current juncture, 24,650–24,750 represents a formidable barrier, and a decisive breakthrough at this level could catalyze a new phase of momentum in the current week, which may open the doors for the 25,000 mark. On the other hand, 24,500 is expected to provide a cushion against potential declines, while the critical support level is situated around the 24,400–24,350 zone.
The current week is expected to be pivotal in shaping the intermediate trend following several significant developments. Given the current ambiguity surrounding the broader trend, it is recommended to adopt a stock-centric strategy while implementing effective risk management practices.
Key Resistance: 24,700, 24,750
Key Support: 24,500, 24,400
Strategy: Buy Nifty Futures around 24,500, with a stop-loss of 24,350, and book profits near 24,750–24,800.
Dhupesh Dhameja, Derivative Research Analyst at Samco Securities
Nifty ended its six-week decline, holding the key 24,500–24,370 demand zone but struggling to surpass the 24,700–24,800 resistance cluster, where heavy Call writing persists. The index remains in a tight consolidation band of 24,700–24,300, with the daily RSI near 40 and no strong reversal signal. Derivatives positioning reflects a tug-of-war, as the 24,700 strike holds significant Call open interest, and the 24,600 strike leads in Put open interest. India VIX edged up to 12.35, indicating muted volatility. A decisive move above 24,800 or below 24,400 will set the next trend. Until then, a “range trading” approach remains the most prudent strategy.
Key Resistance: 24,700, 24,900, 25,100
Key Support: 24,500, 24,350, 24,200
Strategy: Traders may consider a Short Strangle strategy for the August 21 expiry by selling one lot of 24,700 CE at Rs 119 and one lot of 24,500 PE at Rs 84. This setup aims to profit from range-bound, oscillating price action while keeping directional exposure limited.
Stop-Loss: Hold the strategy until expiry with the maximum Mark-to-Market (MTM) loss capped at Rs 7,500. Target: Hold the strategy until expiry to achieve a maximum profit of Rs 15,263, or consider booking profits once the MTM gains exceed Rs 8,000.
Jay Mehta, Technical Research at JM Financial Services
The Nifty index is trading below its 20-day and 50-day EMAs (with a negative crossover), and the daily chart reflects a bearish structure with lower highs and lower lows. The RSI is below 50, and the MACD is below the centerline, indicating weakening bullish momentum. A break below 24,330 could drive the index toward its 200-day EMA around 24,200. For a sustained upward move, the Nifty must decisively break and close above the resistance zone of 24,750–24,800 and 25,000–25,060.
The broader market's weakness, coupled with a poor advance-decline ratio, supports a bearish bias, making a "sell on rise" approach prudent until a clear close above the resistance zone occurs. Momentum indicators on both daily and weekly charts signal limited bullish strength, with risks of further declines if 24,330 is breached.
Key Resistance: 24,800, 25,060, 25,250
Key Support: 24,330, 24,200, 24,000
Strategy: Take a cautious approach, wait for a breakout above the resistance zone for long positions. Alternatively, consider short-selling if the index closes below 24,330 or look for selling opportunities near resistance levels.
Hardik Matalia, Derivative Analyst at Choice Broking
On the daily chart, the Nifty 50 index formed a bullish-bodied candlestick with a long upper wick and a slight lower wick, indicating buying interest from lower levels but also profit booking near the highs. On the downside, immediate support is placed at 24,500, followed by the 24,400–24,300 range. As long as the index holds above this support zone, further downside is unlikely.
On the upside, immediate resistance is seen near 24,700, followed by the 24,800–25,000 range. A decisive breakout above this resistance zone could boost market confidence and trigger fresh buying interest. Overall, a ‘buy-on-dips’ strategy may be considered as long as the index sustains above the 24,300 mark. Traders are advised to maintain strict stop-loss levels and remain cautious.
Key Resistance: 24,700, 24,800
Key Support: 24,500, 24,400
Strategy: Buy on dips near 24,400 levels for a target of 24,800–25,000 levels, with a stop-loss of 24,300 on a closing basis.
Bank Nifty - Outlook and Positioning
Dhupesh Dhameja, Derivative Research Analyst at Samco Securities
Nifty Bank snapped its two-week losing streak, defending the 54,900–55,000 demand pocket, which also aligns with the 20-WEMA. Yet, the 10–20 DEMA cluster at 55,700–55,800 remains a stubborn ceiling, repeatedly capping attempts to break higher. The index is boxed inside a tight 55,750–54,900 range, with muted momentum and RSI hovering near 40. In the options market, hefty Call open interest at 56,000 and a solid Put base at 55,000 underscore the prevailing congestion. A decisive close above 55,800 could ignite short covering toward the 56,000 Call writers’ zone, but a breach below 54,900 may open the gates to 54,300. Until then, sellers are likely to fade every rally, keeping a ‘sell-on-rise’ bias in play.
Key Resistance: 55,500, 55,700, 56,000
Key Support: 55,000, 54,800, 54,500
Strategy: Traders can consider selling Nifty Bank August Futures if the price falls below 55,400–55,350, setting a stop-loss above 55,650. Profit-taking can be considered once the index reaches 55,000–54,950.
Jay Mehta, Technical Research at JM Financial Services
Bank Nifty formed a distribution range at its high and broke below the support level of 56,230 on July 28, after consolidating in this range from June 24 to July 25, and it corrected by 2,722 points from its recent high. For the past six days, it has been supported by its 100-day EMA, trading in a narrow 725-point range. The index is below its 20-day and 50-day EMAs (with a negative crossover) but remains above its 100-day and 200-day EMAs.
The price action shows a bearish structure with lower highs and lower lows. Both daily and weekly RSI and MACD indicate potential for continued consolidation or profit booking if support levels are breached. Bank Nifty is holding up relatively better than the Nifty. A critical support is at 54,900, and a decisive break below this could lead to further declines toward 54,470 or 54,000. Momentum indicators on daily and weekly charts suggest ongoing consolidation or potential downside if 54,900 is broken.
Key Resistance: 55,800, 56,000, 56,400
Key Support: 54,900, 54,470, 54,000
Strategy: For a conservative strategy, wait for a breakout above 56,000 to enter buy positions. Alternatively, consider short-selling on a break below 54,900 or look for selling opportunities near the 56,000 resistance levels.
Osho Krishan, Chief Manager - Technical & Derivative Research at Angel One
Bank Nifty prices appear to be locked in a narrow range, with 55,600 capping the upside and the psychological 55,000 level providing support on the downside. As long as prices remain within this band, a meaningful uptick in trending momentum is unlikely. A breakout beyond this range could shift control decisively to either buyers or sellers, depending on the direction, with the current consolidation potentially acting as a springboard.
Notably, the hourly chart hints at a rounding bottom formation, but this setup should only be acted upon once confirmed by a breakout above the 55,600–55,700 zone. In terms of levels, immediate support is placed in the 55,100–55,000 zone, followed by a further stronger support in the 54,600–54,400 band. On the flip side, immediate resistance is placed in the 55,650–55,700 band, followed by stronger resistance in the 55,850–56,000 zone.
Key Resistance: 55,650, 55,700
Key Support: 55,000, 54,600
Strategy: Buy Bank Nifty Futures around 55,000 for a potential target of 55,700, with a stop-loss of 54,600.
Hardik Matalia, Derivative Analyst at Choice Broking
On the daily chart, Bank Nifty formed a strong bullish-bodied candlestick with an upper wick, indicating buying interest from lower levels along with some profit booking near the highs. The index continues to trade below both its short-term (20-day) and medium-term (50-day) EMAs, signaling underlying near-term weakness.
Overall, a ‘buy-on-dips’ strategy can be considered as long as the index holds above the 54,800 zone. While the intraday recovery is encouraging, traders should remain cautious and adopt a stock-specific approach with strict stop-losses amid ongoing market fluctuations.
Key Resistance: 55,500, 55,800
Key Support: 55,000, 54,800
Strategy: Buy on dips near the 55,000 level for a target of 55,800–56,000, with a stop-loss at 54,800 on a closing basis.
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.
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