Trading Plan: Will Nifty continue to outperform Bank Nifty on monthly F&O expiry day?

Nifty Trading Plan

The benchmark Nifty 50 outperformed Bank Nifty on August 28, recording a new closing high and continuing an upward move for ten days in a row, with a positive trend in the momentum indicators. The northward journey is expected to continue amid consolidation, with the next target at 25,200-25,250, provided the index sustains above 24,950 as support. Meanwhile, 24,800 is likely to act as a strong support for the index. Bank Nifty is likely to face a hurdle at 51,500 on the higher side, with 50,800 being the immediate support, according to experts.

On Wednesday, the Nifty 50 was up 35 points at 25,052 ahead of the August derivative contracts expiry scheduled on August 29, while Bank Nifty dropped 135 points to 51,144. On the NSE, 1,398 shares declined, while 944 shares advanced.

Nifty Outlook and Strategy

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas

The upward movement has been aided by sectoral rotation, helping Nifty stay at elevated levels. Nifty has formed a Doji candle, indicating consolidation. The uptrend can continue, and in case of a dip towards 24,920 – 24,850, where the key hourly moving averages are placed, it is likely to act as a crucial support zone. On the upside, 25,200 – 25,250 is the immediate hurdle zone.

Key Resistance: 25,200, 25,250

Key Support: 24950, 24,870

Strategy: Buy Nifty with a stop-loss of 24,870 and a target of 25,250.

Vidnyan S Sawant, Head of Research at GEPL Capital

On Wednesday, Nifty reached a new all-time high of 25,129, maintaining its strength at elevated levels. On the weekly charts, the index has formed a bullish candle pattern for the past four weeks, showing a consistent pattern of higher highs and higher lows. On the daily charts, the index has closed positively for ten consecutive trading sessions, indicating strong short-term market optimism. The RSI (Relative Strength Index) momentum indicator, currently above 65, further reinforces this positive momentum. Looking ahead, immediate resistance for Nifty is expected at the 25,400 and 25,700 levels, while strong support is observed at 24,800, with additional support at 24,500.

Key Resistance: 25,350, 25,700

Key Support: 24,800, 24,500

Strategy: Buy Nifty at CMP for a target of 25,400 and a stop-loss of 24,800.

Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities

Nifty has formed a major support area in the zone of 24,900-24,800, and the bias is likely to remain in favour of bulls as long as this support zone holds. On the higher side, the index could continue its journey northward, with the immediate hurdle seen at the 25,200 mark.

Key Resistance: 25,100, 25,200

Key Support: 24,950, 24,800

Strategy: Buy on dips near 24,950, with a stop-loss below 24,800, and a target of 25,200.

Bank Nifty - Outlook and Positioning

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas

Bank Nifty traded within the range of the previous trading session and closed in the red. It has been underperforming due to subdued price action in the key heavyweights of the index. In terms of levels, 50,950 – 50,850 shall act as a crucial support zone, while 51,500 – 51,600 is the immediate hurdle zone.

Key Resistance: 51,400, 51,500

Key Support: 50,900, 50,800

Strategy: Buy Bank Nifty with a stop-loss of 50,800 and a target of 51,500 - 51,700.

Vidnyan S Sawant, Head of Research at GEPL Capital

Bank Nifty has been underperforming relative to the benchmark Nifty on the weekly charts, struggling to close above the 51,350 resistance level. On the daily charts, it is forming a rising wedge pattern, signaling a potential contraction in its movement. The RSI is hovering around 50, indicating a lack of strong momentum. For Bank Nifty to potentially move towards its all-time high, it will need to sustain above the 51,350 level.

Key Resistance: 51,350, 52,550

Key Support: 50,550, 49,600

Strategy: Buy Bank Nifty if it sustains above 51,350 for a target of 52,550, and a stop-loss of 50,800.

Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities

Bank Nifty is trading in a rising channel with the formation of a higher low pattern. The index is also sustaining well above its key psychological level of 50,500. As long as this support zone holds, we can expect a potential rally in Bank Nifty in the upcoming sessions. On the higher side, the index has a major hurdle in the zone of 51,400-51,500, above which we could witness a fresh round of short covering that could take the index towards the 52,000 mark.

Key Resistance: 51,400, 51,500

Key Support: 50,800, 50,600

Strategy: Buy Bank Nifty on dips near 50,900, with a stop-loss above 50,600, and a target of 51,400.

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