Trading Plan: Will Nifty consolidate at 25,000, Bank Nifty hold 51,000?

Nifty Trader

The Nifty 50 gained strength after a couple of days of consolidation and closed above the psychological 25,000 mark on August 26, continuing its upward journey for the eighth consecutive session. According to experts, if the index holds 25,000 amid likely consolidation, the 25,100-25,400 levels are the ones to watch in the coming sessions, while immediate support lies in the 24,900-24,800 zone. For the Bank Nifty, 51,500 is expected to be a hurdle on the higher side, with support at 51,000.

On Monday, the Nifty 50 jumped 188 points to 25,011, and the Bank Nifty climbed 215 points to 51,148. On the NSE, 1,244 shares advanced, while 1,167 shares declined.

Nifty Outlook and Strategy

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

The Nifty has managed to close above the 25,000 level, indicating that the probability of a new lifetime high is quite high. The momentum indicator MACD (Moving Average Convergence Divergence) is well in buy mode on the daily and weekly charts, indicating that the short-term trend is positive. From a derivatives perspective, the options data indicates that the immediate support is pegged in the range of 24,800 to 25,000 levels, whereas the immediate resistance is now pegged in the range of 25,200 to 25,400 levels. The PCR (Put Call Ratio) is trading well above the 1 level, at 1.23, and the index is also trading well above its maximum pain levels at 24,900, hence the overall trend looks positive. As long as the 24,800 level is not broken in the near term on a closing basis, the short-term trend remains positive for fresh highs.

Key Resistance: 25,200, 25,400

Key Support: 24,900, 24,800

Strategy: Buy with a stop-loss of 24,800, and aim for targets of 25,200 and 25,400.

Mehul Kothari, DVP – Technical Research at Anand Rathi

From a technical standpoint, we are currently observing a Double Top formation at these levels, and the RSI (Relative Strength Index) on the daily chart is indicating a potential three-point negative divergence. Looking ahead, while a move above 25,100 on the Nifty 50 could extend the rally towards 25,200 – 25,400, it would be prudent to consider booking profits in individual stocks at these higher levels. For the short term, the new support level to watch is 24,800 in the upcoming sessions.

Key Resistance: 25,100, 25,200

Key Support: 24,800, 24,600

Strategy: Buy Nifty Futures above 25,100, with a stop-loss of 24,990 and a target of 25,200 - 25,300.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

The Nifty is currently exhibiting strong bullish momentum, with the 25,000-25,080 range serving as an immediate and crucial resistance zone. If the index struggles to break through this level, a phase of profit booking may ensue. However, a decisive move above 25,080 could open the door for a rally towards the 25,250 mark. On the downside, the 24,880-24,770 range acts as an immediate demand zone. If this level is breached, the next significant support lies at the 20-day moving average (20-DMA) of 24,550.

Key Resistance: 25,080, 25,250

Key Support: 24,880, 24,770, 24,550

Strategy: Consider buying on dips near 24,880, with a stop-loss at 24,550 and a target of 25,250.

Bank Nifty - Outlook and Positioning

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

The Bank Nifty too has closed well above the 51,000 level, where there were multiple swing resistances as well as the highest open interest in the Call front. Now, since those levels have been taken out, the next resistance on the upside is at 51,500, with immediate support at 51,000 and below that at 50,500 levels. If the Bank Nifty manages to surpass 51,500, it is very likely to inch towards 52,000 levels. The PCR is at 0.77, indicating that the bears have the upper hand. However, there was clear Call unwinding at the lower strikes (i.e., 51,000, 50,900, and 50,800), along with clear addition in Puts at almost all strikes, with the maximum at 51,200, indicating a high probability of an upside from here. The index has closed well above its VWAP (Volume Weighted Average Price) level of 51,000, which is positive in the short term.

Key Resistance: 51,500, 52,000

Key Support: 51,000, 50,800

Strategy: Buy with a stop-loss of 50,800, and target levels of 51,500 and 52,000

Mehul Kothari, DVP – Technical Research at Anand Rathi

Although the Nifty Bank index managed to close well above the 51,000 mark, it did not confirm a breakout. A close above 51,200 would have validated a breakout from the falling channel pattern. However, the index fell short of this level in Monday’s session. Consequently, further upside is anticipated only if the index moves above 51,300 in the spot market or closes above 51,200. On the downside, a breach of the 51,000 level could trigger some profit-taking in the near term.

Key Resistance: 51,300, 51,700

Key Support: 51,000, 50,700

Strategy: Wait and watch or buy above 51,300 in spot.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

Bank Nifty has established a strong base at its 100-day moving average (DMA) and is currently trading above the 20-day moving average (DMA). However, the 51,100 to 51,500 range is a crucial supply zone. A breakout above 51,500 or a dip below 50,500 will likely determine the next significant trend in the market.

Key Resistance: 51,500, 52,000

Key Support: 51,000, 50,550, 50,000

Strategy: Consider buying on dips near 51,000, with a stop-loss at 50,550 and a target of 52,000.

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