The Nifty 50 remained under pressure, with weakness in momentum indicators, but sustained above the midline of the Bollinger Band (slightly above 25,900). Until the index holds this level on a closing basis, the possibility of a rebound toward 26,000–26,100 is high, but falling decisively below it can open the door first for 25,800 amid consolidation. Meanwhile, the Bank Nifty needs to reclaim and sustain above 59,700 for a move toward 60,000–60,100; however, below this level, the banking index can consolidate, with 58,900–58,850 acting as key support, experts said.
On December 3, the Nifty 50 slipped 46 points to 25,986, while the Bank Nifty climbed 74 points to 59,348, with consistent weakness in market breadth. A total of 1,978 shares were under pressure against 874 shares that advanced on the NSE.
Nifty Outlook and Strategy
Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research) at Centrum Broking
The Nifty index extended its decline for the fourth consecutive session, briefly slipping below the psychological 26,000 level. It managed to find support at the 21-DMA around 25,920 and staged a sharp rebound from there. A Doji candle formed on the daily chart, reflecting indecision among market participants.
The next crucial support is placed near 25,800, in line with the rising trendline connecting major swing lows. On the indicator front, the MACD has turned bearish with a fresh sell crossover, pointing toward short-term consolidation. Despite this, the broader trend remains constructive as long as the index sustains above 25,800 on a spot basis.
Given the overall setup, it will be important for Nifty to negate the lower-high, lower-low structure and move above the previous session’s high of 26,255 on Futures. A breakout above this level could pave the way for a follow-up rally toward the 26,450 mark.
Key Resistance: 26,070, 26,200
Key Support: 25,920, 25,800
Strategy: Buy Nifty Futures above 26,225, with a stop-loss of 26,050, targeting 26,450.
Rupak De, Senior Technical Analyst at LKP Securities
After a volatile session, the Nifty 50 index managed to float above the 21-EMA, keeping the short-term bullish bias intact. However, bearish sentiment has begun to surface, as the index has formed a bearish divergence on the daily chart.
In addition, it has fallen below a rising trendline, adding to the weakness in the market. From here, if the index sustains the recovery—as expected after taking support at 25,900—it may move towards 26,060 on the higher side, where it could face resistance once again, potentially triggering another decline. If the index fails to cross this level and faces resistance around 26,060, it may witness a more serious correction, with downside potential towards 25,550.
Key Resistance: 26,060
Key Support: 25,900, 25,550
Strategy: Buy Nifty 26,000 strike Put around Rs 80, with a stop-loss of Rs 50, targeting Rs 140.
Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities
The benchmark index Nifty started December on a strong note by hitting a fresh all-time high of 26,325 in the very first trading session. However, the initial optimism quickly faded as the index witnessed profit booking, leading to a sharp correction of over 400 points in just three sessions. On Wednesday, Nifty slipped below its crucial 20-day EMA, signalling weakness, but staged a smart recovery in the second half to close back above this level. On the daily chart, the formation of a High Wave candle reflects indecision and a tug-of-war between bulls and bears following the recent sell-off.
Meanwhile, the broader market is under significant pressure. The Nifty Smallcap 100 has closed below its 200-day EMA for the second consecutive session, with its daily RSI falling below the 40 mark, indicating weakening momentum. Similarly, the Nifty Midcap 100 has slipped under its 20-day EMA, and the Advance/Decline ratio has remained firmly in favour of decliners over the past few sessions, highlighting stress in the broader space.
Going ahead, the zone of 25,850–25,800 is expected to act as a critical support for Nifty, as the previous swing low lies in this region. As long as the index holds above 25,800, the uptrend remains intact, and Nifty could retest 26,100, followed by 26,250 in the short term. A decisive break below 25,800, however, would open the door for deeper weakness.
Key Resistance: 26,100, 26,250
Key Support: 25,850, 25,800
Bank Nifty - Outlook and Positioning
Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research) at Centrum Broking
Bank Nifty showed strong resilience, staging a sharp rebound and closing above the 59,000 mark. Immediate support is positioned near the 21-day moving average at around 58,800. A sustained move above 59,700 could trigger further upside toward 60,500, aided by potential short covering.
Momentum indicators and weekly oscillators continue to signal strength, reinforcing the bullish bias. Based on this setup, traders may look at initiating long positions in Bank Nifty Futures around 59,600–59,700, with a stop-loss below 59,300. A pullback toward the 60,300 zone remains likely.
Key Resistance: 59,600, 60,000
Key Support: 58,800, 58,400
Strategy: Buy Bank Nifty Futures in the range 59,600–59,700, with a stop-loss of 59,300, targeting 60,300.
Rupak De, Senior Technical Analyst at LKP Securities
The Bank Nifty managed to move back within the rising channel by the end of the day, indicating a continuation of the short-term bullish trend. Besides, the index has remained above the 21-EMA on the daily timeframe, reinforcing the bullish sentiment.
Resistance is placed at 59,500, and a decisive move above this level is likely to take the index towards 60,000 and beyond. On the lower end, support is placed at 58,800. As long as it remains above 58,800, the index is likely to continue favouring the bulls.
Key Resistance: 59,500, 60,000
Key Support: 58,800
Strategy: Buy Bank Nifty 59,800 strike Call at Rs 650, with a stop-loss of Rs 515, targeting Rs 800.
Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities
The banking benchmark index, Bank Nifty, started December on a strong note by hitting a fresh all-time high of 60,114 before witnessing a throwback. This throwback was arrested near its crucial 20-day EMA level on Wednesday, signalling strong underlying support. On the daily chart, the index formed a bullish candle with a lower shadow, indicating buying interest at lower levels. Moreover, the daily RSI continues to remain in the super bullish zone as per the RSI range-shift rules, reinforcing the positive momentum.
Going ahead, the 20-day EMA zone of 59,000–58,900 is expected to act as a key support area for the index. As long as Bank Nifty trades above 58,900, the uptrend remains intact, and the index is likely to resume its upward journey, potentially testing 59,800 first and then 60,300 in the short term.
A sustained move above 60,300 could open the door for further gains, while any breach below 58,900 would indicate a shift in sentiment and invite profit booking.
Key Resistance: 59,800, 60,300
Key Support: 59,000, 58,900
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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