Trading Plan: Will Nifty 50, Bank Nifty start September series on positive note?

NIfty Trading Plan For August 29

The Nifty 50 and Bank Nifty corrected sharply for another session with long bearish candle formations and weak momentum indicators, signalling bearish sentiment. According to experts, after a sharp sell-off, a relief rally can be possible, but the sustainability of the same is key to watch. If the index decisively breaks 24,400 (upward sloping support trendline), then 24,340 (August low) and 24,260 (200-day EMA) are the levels to watch. However, 24,600–24,700 can be a possible resistance on the higher side. If the Bank Nifty holds the previous day’s close, a rebound toward 54,000–54,400 is possible. However, falling decisively below it can open the door for 53,570 (200-day EMA), experts said.

On August 28, the Nifty 50 plummeted 211 points (0.85 percent) to close at 24,501, while the Bank Nifty nosedived 630 points (1.16 percent) to 53,820. The market breadth was weak. A total of 1,901 shares saw selling pressure compared to 835 shares that saw buying interest on the NSE.

Nifty Outlook and Strategy

Dhupesh Dhameja, Derivative Research Analyst at Samco Securities

Nifty closed at its psychological base of 24,500, slipping into a fragile structure after back-to-back bearish closes and a breakdown below key supports. The index now trades well under its 20-, 50-, and 100-day EMAs, with resistances shifting lower. The 24,700–24,800 band has flipped into a strong supply zone, while 24,450–24,500 remains the last defence. Options positioning highlights aggressive Call writing at 24,800, alongside unwinding in Puts, signalling limited conviction for any rebound. Unless Nifty decisively reclaims 24,800, sellers will retain control, making a “sell-on-rise” strategy the most prudent approach in the current market setup.

Key Resistance: 24,650, 24,780, 24,850

Key Support: 24,450, 24,300, 24,200

Strategy: Traders may consider a Bear Call Spread strategy for the September 2 expiry by buying one lot of 24,600 CE at Rs 91 and selling one lot of 24,350 CE at Rs 249. This setup is designed to capitalize on a potential downside move while limiting upside risk.

Stop Loss: Hold the strategy until expiry, with the maximum Mark-to-Market (MTM) loss capped at Rs 6,881Target: Hold the strategy until expiry to achieve a maximum profit of Rs 11,869, or consider booking profits once the MTM gains exceed Rs 7,200.

Jay Mehta, Technical Research at JM Financial Services

Nifty hit strong resistance at 25,160, aligning with the 61.8% Fibonacci retracement of its July–August correction. The bullish gap from August 18 was filled by Tuesday’s candle, and Thursday’s close below the 24,600–24,650 gap support zone confirms ongoing bearish momentum. Trading below the 20, 50, and 100 EMAs, all with negative slopes, the index shows a bearish bias.

Momentum indicators, with RSI at 41 and a negative MACD crossover, indicate sustained downward pressure due to dominant bearish sentiment. On the weekly chart, last week’s shooting star candle after a gap-up opening, followed by this week’s price action, reinforces the bearish outlook. Weekly momentum and trend indicators suggest a sideways-to-bearish trend will continue.

Key Resistance: 24,700, 24,850, 25,000

Key Support: 24,400, 24,260, 24,000

Strategy: Sell on rallies near resistances at 24,850 and 25,000. Seek short-term buying opportunities around 24,260–24,300 after confirming price action, with a stop-loss at 24,175, targeting 24,400–24,500.

Hardik Matalia, Derivative Analyst at Choice Broking

The Nifty 50 index has formed a strong bearish candle for the second consecutive session, signalling sustained weakness. A breach below the 24,500 level could further accelerate selling pressure, with the next support placed in the 24,300–24,200 zone, which also coincides with its long-term 200-day EMA.

On the upside, immediate resistance is placed at 24,700, followed by 24,800, while the 25,000 level remains a strong hurdle. Only a decisive move and sustained close above 25,000 would signal a pause in the ongoing downtrend and may restore some confidence among market participants. Overall, a sell-on-rise strategy is advisable in the current setup. Traders are advised to maintain strict stop-loss levels and remain cautious.

Key Resistance: 24,700, 24,800

Key Support: 24,500, 24,300

Strategy: Sell on rise near 24,800 levels for the target of 24,300–24,200 levels, with a stop-loss of 25,000 on a closing basis.

Bank Nifty - Outlook and Positioning

Dhupesh Dhameja, Derivative Research Analyst at Samco Securities

Nifty Bank has entered a fragile phase, confirming a Head & Shoulder breakdown and trading near its three-month lows. With the index well below its 20-, 50-, and 100-day averages, the technical setup points to sustained weakness. The 54,500–54,700 band has turned into immediate resistance, while 53,450–53,500 — overlapping with the 200-DEMA — is the last defence. Options positioning, dominated by Call writers at 55,000, signals limited scope for recovery. Until this level is decisively reclaimed, supply will outweigh demand, making “sell-on-rise” the most reliable approach for traders.

Key Resistance: 54,000, 54,500, 55,000

Key Support: 53,500, 53,300, 53,000

Strategy: Traders can initiate short positions in Nifty Bank August Futures around 54,000–54,100, keeping a protective stop-loss above 54,350, while eyeing 53,650–53,580 for profit booking.

Jay Mehta, Technical Research at JM Financial Services

Bank Nifty, weaker than Nifty, broke below its 100EMA base on Tuesday, with Thursday’s follow-up move confirming bearish sentiment. Both Tuesday and Thursday’s candles are strongly bearish, with wide ranges and closes near the day’s lows. The index shows a negative crossover between the 20 and 50 EMAs with an increasing spread and downward-sloping EMAs, signalling further bearishness. The price is approaching the 200EMA at 53,570. Momentum indicators, with RSI at 29 and MACD below the centreline, support the bearish trend, while volatility indicators suggest elevated volatility in upcoming sessions. Trend indicators confirm the bearish trend’s continuation.

Key Resistance: 54,700, 55,000, 55,500

Key Support: 53,570, 53,000, 52,650

Strategy: Sell on rallies near resistances at 54,700 and 55,000. Look for short-term buying opportunities around 53,500–53,570 (200EMA support) after observing price action, with a stop-loss at 53,400, targeting 53,800 and 54,000.

Hardik Matalia, Derivative Analyst at Choice Broking

Currently, Bank Nifty is holding slightly above its long-term EMA, which will be crucial to watch for further trend confirmation. On the downside, immediate support is placed at 53,500; a breach below this level could open the gates for extended selling towards the 53,000 mark. On the upside, immediate resistance is seen at 54,000, followed by 54,500–54,800. The index needs to decisively surpass and sustain above these levels to signal a pause in the current decline. As long as Bank Nifty trades below the 55,000 mark, a sell-on-rise approach remains advisable. Traders should stay cautious, adopt a stock-specific strategy, and maintain strict stop-losses amid ongoing market volatility.

Key Resistance: 54,000, 54,500

Key Support: 53,500, 53,000

Strategy: Sell on rise near 54,500 levels for the target of 53,500–53,000 levels, with a stop-loss of 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.