Trading Plan: Will Nifty manage to defend 23,400, Bank Nifty sustain above 49,500?

Nifty Trading Plan

Nifty 50 and Bank Nifty finished the session flat with a negative bias on February 1, the Budget Day, defending the 23,400 level on a closing basis and forming a high-wave pattern on the daily charts, indicating volatility. The 300-point trading range seen on Budget Day (23,300–23,630) will be crucial to watch in the upcoming sessions. If Nifty 50 manages to close above 23,630 (which coincides with the 200-day EMA), the 23,800-23,900 zone could be possible. However, breaking below 23,300 could open the doors to the 23,100 zone. The Bank Nifty needs to surpass 49,700 on a closing basis for a move towards 50,000 and 50,500, while 49,000 could act as a support, according to experts.

On Saturday, February 1, Nifty 50 declined by 26 points to 23,482, while the Bank Nifty fell by 80 points to 49,507, with slightly positive market breadth. A total of 1,287 shares gained, compared to 1,240 shares that saw a correction on the NSE.

Nifty Outlook and Strategy

Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One

Nifty has certainly seen a respite precisely at the lower end of the 'Falling Wedge' pattern (on the daily timeframe), which we have been mentioning for the last couple of weeks. Now that the major event, the Union Budget, is behind us, it appeared to be a non-event, but practically speaking, FII participation was very minimal. Hence, the actual reaction is likely to be witnessed on Monday, and we need to wait for a day or two to understand whether the market has truly discounted the Budget factor. Additionally, the risk of Donald Trump imposing various tariffs is still looming over the market. Therefore, it's better not to jump to any conclusions at this moment and keep a close eye on these developments.

Technically, the 20-day EMA levels of 23,400–23,350 should be viewed as immediate support, and in case of any deviation, the 23,100–22,800 zones should be treated as key support levels in the coming week. On the upside, the 50-day EMA around 23,670–23,700 and the upper band of the ‘Falling Wedge’ near 23,800–24,000 are likely to act as resistance levels to watch in the upcoming period.

On the options front, open interest concentration has piled up at the 23,200–23,000 strikes (Put) and 23,500–24,000 strikes (Call), indicating an intermediate trading range.

Key Resistance: 23,670, 23,700, 23,800

Key Support: 23,400, 23,350, 23,100, 23,000

Strategy: Buy Nifty Futures on dips around 23,300, with a stop-loss of 23,000, and book profits near 23,800.

Rajesh Palviya, Senior Vice President Research (Head Technical Derivatives) at Axis Securities

Nifty closed with a weekly gain of 390 points. The index formed a Bullish Engulfing pattern on the weekly chart, which is a key reversal signal, completely overshadowing the previous week’s movement. This pattern emerged at an important support zone near 23,000, highlighting its significance. A confirmation of this pattern would occur if Nifty surpasses last week’s high, signaling a potential trend reversal to the upside.

From a technical perspective, a sustained move above 23,650 could trigger buying, pushing the index towards 23,850–24,000. Conversely, a break below 23,250 may lead to selling pressure, dragging Nifty down towards 23,000–22,750. We expect Nifty to trade within a range of 24,000–22,750 for the week, with a mixed bias. Notably, the weekly RSI (Relative Strength Index) is on the verge of crossing above its reference line, indicating a possible shift in momentum to the upside.

Key Resistance: 23,650, 23,800

Key Support: 23,300, 23,100

Strategy: Buy Nifty Futures around 23,300, with a stop-loss of 23,150, targeting 23,600–23,700.

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

Nifty formed a low on January 27 near 22,787, and we have already seen a rise of more than 800 points since then. The short-term low appears to be in place for the coming weeks, according to the 55-Day Time Cycle method that we follow. On the upside, the immediate hurdle is at 23,800, which is the trendline resistance, and on the downside, support is at 23,120 levels. In the short term, we can expect the market to consolidate between 23,630 and 23,300 levels before resuming the positive trend. Any breach below 23,300 could result in a retest of the 23,120 level, after which an upside move is expected. Therefore, the overall strategy for Nifty has changed from "sell on rise" to "buy on dips" with upside targets of 23,800.

In summary, the overall trend for Nifty is sideways for now, within the range of 23,630 to 23,300 levels. A breach of these levels will set the trend in that direction. A break above 23,630 will resume the trend in the form of wave (f) for a move to 23,800, followed by 24,300. Any breach below 23,300 will result in a retest of 23,120, after which the uptrend could resume. Unless the range of 23,630–23,300 breaks, consider trading short OTM (out-of-the-money) options and riding the range. If a breakout occurs above 23,630, take long positions for upside targets.

Key Resistance: 23,800

Key Support: 23,120

Strategy: Long positions can be created above 23,560, with a stop-loss of 23,490 and a target of 23,630, followed by 23,700.

Bank Nifty - Outlook and Positioning

Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One

The formation of a Doji near a pivotal resistance in the 49,650–49,700 band, along with the presence of a key overhead dynamic resistance at the 50-day EMA at 50,225, which also coincides with the 38.2% retracement of the prior downswing, reinforces our cautious outlook at current levels. The index is facing consistent supply pressures at higher levels, and unless we witness a convincing breakout and a close above the mentioned resistance levels, it would be prudent to avoid aggressive trades, particularly on the long side. That said, a decisive close above the 49,650–49,700 zone would validate a bullish double-bottom pattern, adding further momentum to the ongoing uptrend. While resistances are well-defined, immediate support is placed at the psychological level of 49,000, followed by stronger support in the bullish gap zone of 48,450–48,200. On the options front, open interest concentration has piled up at the 50,000 strike Call and 49,000 strike Put, indicating an intermediate range.

Key Resistance: 49,650, 49,700, 50,225

Key Support: 49,000, 48,450

Strategy: Buy Bank Nifty Futures around 49,000, with a stop-loss of 48,600, targeting 49,700.

Rajesh Palviya, Senior Vice President Research (Head Technical Derivatives) at Axis Securities

Bank Nifty closed with a weekly gain of 1,139 points. The index has formed a Bullish Engulfing pattern on the weekly chart, which is a strong reversal signal that has completely absorbed the previous week's move. However, confirmation is crucial—a break above last week's high could signal the beginning of an upward trend. The index faced significant resistance near the breakdown zone at 49,700, which is likely to act as a formidable barrier soon.

From a technical perspective, a sustained move above 50,000 could trigger fresh buying, potentially driving the index towards 50,500–51,000. Conversely, a break below 49,000 may invite selling pressure, pulling it towards 48,500–48,000. For the upcoming week, we expect Bank Nifty to trade within a range of 51,000–48,000 with a mixed bias. Notably, the weekly RSI is on the verge of crossing above its reference line, indicating a potential shift in momentum to the upside.

Key Resistance: 49,800, 50,000

Key Support: 49,200, 49,000

Strategy: Buy Bank Nifty Futures near 49,100, with a stop-loss of 48,800, targeting 49,800 and 50,000.

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

On the daily chart, Bank Nifty has still not closed below the previous day’s low since January 27, which keeps the daily bias in favour of bulls as long as we do not see a close below the previous day’s low. Also, prices have formed a double-bottom pattern and are now trading at the neckline of it. A close above 49,700 can confirm a breakout of the pattern, which could result in fresh buying in the index. The next few days of price action are crucial to clarify the bigger picture. In summary, Bank Nifty is at a deciding point. A break above 49,700 could lead to fresh buying towards 50,000 or higher. On the downside, 48,900 is the nearest support. A breach below it would be a sign of concern.

Key Resistance: 50,200

Key Support: 48,900

Strategy: Long positions can be created above 49,700 with targets of 50,000, followed by 50,200, and a stop-loss of 49,400 levels.