Trading Plan: Will Nifty hold 24,800, Bank Nifty sustain above 51,000 ahead of FOMC meet?

Market Trend

Despite beginning the week on a strong note, bears stepped in and dragged the Nifty 50 significantly down from 24,999.75 (all-time high). However, the bulls managed to defend 24,800 on a closing basis, which can be an immediate support for the index. The key support is expected to be in the 24,600-24,500 zone, while the immediate resistance will be at the 25,000 mark. For the Bank Nifty, 51,000 is likely to be an immediate support, while resistance can be at 51,500, according to experts. The FOMC will begin its two-day meeting on Tuesday and conclude on Wednesday night.

On Monday, the Nifty 50 settled at a fresh all-time closing high of 24,836.10, up 1.25 points, and the Bank Nifty lost more than 900 points from day's high, before closing with 110 points gains at 51,406. On the NSE, 1,369 shares advanced, while 1,028 shares declined.

Nifty Outlook and Strategy

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

Now, from hereon, 24,500 is a very crucial support, and as long as those levels are held, the overall bias will remain positive for buy-on-dips. However, on the hourly charts, it seems that there is an impulse wave on the way up, and within that, there may be a wave 4 correction. Hence, there can be some consolidation in the range of 25,000 to 24,500 levels. The momentum indicator MACD (Moving Average Convergence Divergence) is still in the sell mode on the daily charts; however, it is in the buy mode on the weekly charts, so a wave 4 correction can't be ruled out for the rest of the week. From the derivatives point of view, the maximum open interest is at the 25,000 strike Call, whereas on the Put side it is at the 24,500 strike Put. Therefore, the range is 24,500 to 25,000 levels. The Put Call ratio (PCR) is at 0.97, which is almost neutral. However, the maximum pain is at 24,800 levels and the modified maximum pain is at 24,637 levels, and it is above those levels, so it is bullish.

Key Resistance: 24,900, 25,000

Key Support: 24,800, 24,500

Strategy: Buy on dips near 24,650, with a stop-loss of 24,500, and a target of 24,900 and 25,000.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

Nifty touched its new all-time high of 24,999.75 and approached the psychological mark of 25,000. If it manages to sustain above this level, we could see further market expansion. On the downside, the 20-DMA (Daily Moving Average) at 24,600 will serve as an immediate and strong support level, while 24,400 has become a key support level for the bulls.

Key Resistance: 25,000, 25,200

Key Support: 24,600, 24,400

Strategy: Consider buying on dips near 24,600, with a stop-loss at 24,400, and a target of 25,000 and 25,200.

Mehul Kothari, DVP – Technical Research at Anand Rathi

On the daily chart, we are now witnessing negative divergence on the RSI (Relative Strength Index), and that’s why we feel that it is better to start booking profits. Upside resistance is at 25,000 – 25,200, and on the downside, 24,800 – 24,600 could be the support for the coming session.

Key Resistance: 25,000, 25,200

Key Support: 24,800, 24,600

Strategy: Sell on rise in Nifty near 25,000, with a stop-loss of 25,250 and a target of 24,600.

Anshul Jain, Head of Research at Lakshmishree Investments & Securities

The Nifty 50 also failed to surpass its recent swing high and the previous week's high, indicating a possible trend reversal. However, this appears more like profit booking rather than significant selling pressure.

Monday's low of 24,774 will be a crucial support level to monitor. Any failure by bears to push the index below this level could trigger a wave of short covering, propelling the Nifty towards the 25,200 mark. Traders should keep a close eye on this key level, as it could set the tone for the market's next move. Stay tuned for more updates and analysis.

Key Resistance: 25,000

Key Support: 24,775

Strategy: Buy the rejection below previous day's low, with a stop-loss of 24,720.

Bank Nifty - Outlook and Positioning

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

Technically, Bank Nifty has reversed exactly from the 61.8 percent retracement of the previous fall, and the previous swing resistance is already at 52,500; hence that is the short-term resistance. The support on the lower side is 51,000 and 50,800 levels, so the range for the Bank Nifty is 50,800 to 52,500, which is a wider range.

From the derivatives point of view, the PCR is at 0.69, and it is not oversold. There has been good Call writing at higher levels from 51,000 to 52,000 levels, hence there can be some volatility in the near term. The maximum pain is at 51,500 levels, and the modified maximum pain level is at 51,401 levels. Since the price is below those levels, the short-term trend is sideways to negative.

Key Resistance: 51,500, 52,,000

Key Support: 51,000, 50,500

Strategy: Sell on rise near 51,800, with a target of 51,000 and 50,500.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

The Bank Nifty is underperforming, but it has managed to hold its 50-DMA around the 50,700 level. On the upside, the 51,750-52,000 range will remain a key resistance area. A move above this range could indicate strength, while a move below the 50-DMA could lead to further pressure on the index.

Key Resistance: 52,000, 52,400

Key Support: 50,700, 50,400

Strategy: Consolidation in Bank Nifty may continue. Follow buy on dips near 51,150, with a stop-loss of 50,700, and a target of 52,000.

Mehul Kothari, DVP – Technical Research at Anand Rathi

The Nifty Bank index rallied around 1,000 points in a single session to sneak above the 52,000 mark. However, there was a sharp decline in the index, and it turned red. This indicates supply at higher levels. The range of 51,000 – 52,500 would be the trend-deciding factor for the index. A breakout or a breakdown from this range would dictate the next move for Nifty Bank.

Key Resistance: 52,000, 52,500

Key Support: 51,000, 50,600

Strategy: No trade.

Anshul Jain, Head of Research at Lakshmishree Investments & Securities

While Nifty managed to reach a new all-time high, Bank Nifty only bounced from its 10-day EMA (Exponential Moving Average) but failed to reclaim and close above its 20-day EMA at 51,800. This underperformance is noteworthy, especially given the broader market strength.

A key observation is the failed swing low at 51,100. Given this, the immediate upside for Bank Nifty should test the swing high at approximately 52,800 levels. Traders should keep an eye on these critical levels as they will provide insights into the short-term direction of Bank Nifty. Monitoring these movements will be essential for understanding the overall market sentiment and potential trading opportunities.

Key Resistance: 52,050

Key Support: 51,100

Strategy: Buy dips to 51,100, with a stop-loss of 50,850.
Strategy: Buy dips to 51,100, with a stop-loss of 50,850.

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