Trading Plan: Will Nifty, Bank Nifty manage to surpass 20-day EMA?

Nifty Trading Plan

The Nifty 50 closed with a third-of-a-percent loss amid rangebound trading on March 13, failing to defend the 5-day and 10-day EMAs on a closing basis. The index remained stuck within a range of 22,200–22,700, and experts advised that as long as it sustains below 22,700 (the stiff resistance), the sell-on-rally strategy should be followed. In case of a decisive break below the 22,200 support, selling pressure may increase, pushing the index towards the 22,000 mark. The Bank Nifty needs to decisively break and sustain above the 48,500–48,600 zone for further rally toward 49,000; until then, consolidation may continue, with support at the 48,000–47,800 zone. The 20-day EMA for Nifty is at 22,610, and for Bank Nifty, it is at 48,600.

On Thursday, March 13, the Nifty 50 corrected by 73 points, closing at 22,397, while the Bank Nifty gained 5 points, closing at 48,060. Bears maintained control over the market breadth, with about 1,790 shares under pressure compared to 820 advancing shares on the NSE.

Nifty Outlook and Strategy

Dhupesh Dhameja, Derivative Analyst at Samco Securities

Nifty wrapped up the last week (ended March 13) with a 0.7 percent loss, exhibiting a tepid and indecisive performance, leaving market participants in a wait-and-watch mode. Despite the previous week’s attempted recovery, the index failed to maintain its momentum, reinforcing a sideways market structure. On the daily chart, Nifty has persistently traded below its 20-day Exponential Moving Average (DEMA), struggling to surpass the 22,500 mark, which has emerged as a strong resistance zone.

Meanwhile, on the lower end, the index has established a sturdy support base at 22,200, backed by substantial Put writing, further validating a rangebound trend. The 22,200–22,300 zone now acts as a critical support area for the bulls, preventing further downside. However, a convincing breakout above 22,550 is imperative for the bullish momentum to regain strength. As long as Nifty sustains above the 22,200-support zone, any dips are expected to attract fresh buying interest. On the upper side, 22,700 remains a stiff hurdle, making it a tough level to breach.

Key Resistance: 22,500, 22,700, 23,000

Key Support: 22,300, 22,150, 22,000

Strategy: Traders can execute a Range Trading Strategy for the March 20th expiry by buying one lot of 22,300 strike Call at Rs 196 and one lot of 22,500 strike Put at Rs 184, while simultaneously selling two lots of 22,500 strike Call at Rs 89 each and two lots of 22,300 strike Put at Rs 92 each. In case of a stop-loss, the strategy can be held with the maximum Mark-to-Market (MTM) loss capped at Rs 6,500. On the target front, hold the strategy until expiry to achieve a maximum profit of Rs 13,748, or consider booking profits once the MTM gains exceed Rs 7,000.

Chandan Taparia, Head Derivatives & Technicals, Wealth Management at Motilal Oswal Financial Services

Last week, Nifty started on a flattish note, opening around 22,520 on Monday and rallying to 22,676. However, this level acted as a strong resistance, leading to profit booking that dragged the index down to 22,314 in the following session. Over the last few sessions, Nifty has been stuck in a 250–300 point range, lacking a clear directional move. Option writers continued to dominate, and the sharp decay in option premiums made it a challenging environment for buyers. It formed a bearish candle and an inside bar on the daily chart, indicating that pressure remains intact at higher zones. Now it must hold above the 22,330 zone for an upward move toward 22,650 and then the 22,800 zone, while support can be seen at 22,300 and then 22,222 zones.

Key Resistance: 22,650, 22,800

Key Support: 22,222, 22,300

Strategy: Buy Nifty Futures on dips with support at 22,300 for an upside target toward 22,650/22,800 levels.

Hardik Matalia, Derivative Analyst at Choice Broking

On the daily chart, the Nifty index formed a strong bearish-bodied candle with no major higher or lower wicks, indicating strong selling pressure throughout the session and a lack of intraday recovery or buying interest. This suggests that bears remained in control, pushing the index lower without any significant pullback. On the downside, immediate support is at 22,300, and a break below this level could trigger further selling toward the 22,200–22,000 range. On the upside, immediate resistance is seen at 22,550, with a critical hurdle near 22,700. Sustaining above these levels is essential to pause the ongoing downtrend. As long as the Nifty index remains below the 22,700 mark, a sell-on-rise strategy is expected to dominate, with any short-term rebounds likely to face selling pressure. Given the heightened volatility, traders are advised to maintain strict stop-loss measures and avoid overnight positions to protect capital.

Key Resistance: 22,550, 22,700

Key Support: 22,300, 22,200

Strategy: Sell Nifty Futures on a rise near the 22,600 level for the target of 22,300–22,200 levels, with a stop-loss of 22,700 on a closing basis.

Bank Nifty - Outlook and Positioning

Dhupesh Dhameja, Derivative Analyst at Samco Securities

The Nifty Bank index ended the last week on a muted note (down 0.9 percent), exhibiting lacklustre and directionless movement, keeping traders in a cautious stance. On the daily chart, the index has consistently traded below its 10-day Exponential Moving Average (DEMA), struggling to break past the 48,500 mark, which has emerged as a formidable resistance level. On the lower side, 47,800 has proven to be a strong base, supported by substantial Put writing, confirming a well-defined trading range.

With heavy accumulation on both the Call and Put sides, the market is witnessing a classic battle between bulls and bears, further increasing the likelihood of a prolonged consolidation phase. The 47,800–48,000 zone has now become a critical support base for the bulls, while a firm breakout above 48,500 is necessary to trigger fresh buying interest and resume bullish momentum. As long as the Nifty Bank index sustains above the 47,800 level, any dips are expected to invite renewed buying pressure. Meanwhile, on the upside, 48,600 remains a tough barrier, making it a decisive level to watch.

Key Resistance: 48,500, 48,700, 49,100

Key Support: 48,000, 47,800, 47,500

Strategy: Traders can execute a Range Trading Strategy for the March 27 expiry by buying one lot of 47,900 strike Call at Rs 619 and one lot of 48,300 strike Put at Rs 618, while simultaneously selling two lots of 48,600 strike Call at Rs 291 each and two lots of 47,600 strike Put at Rs 316 each. In case of stop-loss, the strategy can be held with the maximum Mark-to-Market (MTM) loss capped at Rs 7,500. On the target side, hold the strategy until expiry to achieve a maximum profit of Rs 20,312 or consider booking profits once the MTM gains exceed Rs 8,000.

Hardik Matalia, Derivative Analyst at Choice Broking

The Bank Nifty index continues to trade below all its key moving averages, including the short-term (20-day), medium-term (50-day), and long-term (200-day) EMAs, indicating persistent selling pressure at higher levels. As long as it remains below these moving averages, the overall sentiment remains sideways to bearish, favouring a sell-on-rise approach. On the upside, immediate resistance is seen at 48,500, with a stronger hurdle at 48,800. Any rise toward these levels is likely to attract selling pressure. A decisive breakout above 49,000 is required to negate the bearish outlook and open the door for higher levels.

On the downside, 47,800 serves as immediate support, followed by 47,500. A break below these levels could accelerate selling pressure, dragging the index below the 47,000 mark. Traders are advised to sell on rises near resistance levels while maintaining strict stop-loss measures. Given the uncertain market environment, closely monitoring price action around key levels is crucial for determining the next directional move.

Key Resistance: 48,500, 48,800

Key Support: 47,800, 47,500

Strategy: Sell Bank Nifty Futures on a rise near 48,800 levels for the target of 48,000–47,500 levels, with a stop-loss of 49,000 on a closing basis.

Chandan Taparia, Head Derivatives & Technicals, Wealth Management at Motilal Oswal Financial Services

Bank Nifty formed a bearish candle on the daily scale as momentum is missing at higher zones. On the weekly scale, it formed a small bearish candle as selling pressure was seen at higher levels, but multiple supports remain intact at lower levels. Now it must hold above the 48,000 zone for a bounce toward 48,250 and then 48,500 levels, while holding below this zone could see some weakness toward 47,750 and 47,500 zones.

Key Resistance: 48,250, 48,500

Key Support: 47,500, 47,750

Strategy: Buy Bank Nifty Futures on dips with support at 47,750 for the upside target toward 48,250/48,500 zones.

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