Trading Plan: Are Nifty, Bank Nifty ready to break higher after 4 days of consolidation?
Given that most technical indicators remain positive, experts believe that a breakout on the higher side cannot be ruled out in the upcoming sessions. For the Nifty 50, 24,700 is the level to watch for an upward journey, while a decisive fall below 24,500 could bring selling pressure.
The Nifty 50 and Bank Nifty continued to consolidate in a tight range for the past four consecutive sessions as of December 11, with traders seeming to await a trigger to break this consolidation range. Given that most technical indicators remain positive, experts believe that a breakout on the higher side cannot be ruled out in the upcoming sessions. For the Nifty 50, 24,700 is the level to watch for an upward journey, while a decisive fall below 24,500 could bring selling pressure. The Bank Nifty needs to defend the 53,300–53,200 support zone for a northward rally towards 54,000. However, if it falls below this support, the index may break below 53,000, experts say.
On Wednesday, December 11, the Nifty 50 closed at 24,642, up 32 points, but the Bank Nifty was under pressure, falling 186 points to 53,391. The market breadth was positive, with a total of 1,344 shares advancing and 1,160 declining on the NSE.
Nifty Outlook and Strategy
Jatin Gedia, Technical Research Analyst, Capital Market Strategy at Mirae Asset Sharekhan
On the daily charts, the Nifty has been stuck in a narrow range of 24,500–24,800 for the past four trading sessions. We expect this rangebound action to continue. A decisive move above 24,750 would suggest that the next leg of the uptrend could resume. On the downside, 24,500 is the crucial support level and a stop-loss for long positions.
As for derivative data, the 24,500 strike Put and 24,600 strike Put have seen decent open interest, suggesting a strong support base. The highest open interest on the Call side is at 24,700, followed by 25,000. The Nifty’s weekly PCR (Put-Call Ratio) stands at 0.71, unchanged from the previous session, indicating slightly bearish sentiment. However, the price action suggests rangebound movement.
Key Resistance: 24,750, 24,800
Key Support: 24,550, 24,510
Strategy: Buy Nifty Futures with a stop-loss of 24,500, targeting 24,750 and 24,858.
Vidnyan S Sawant, Head of Research at GEPL Capital
The Nifty has been trading within a narrow range over the past few days, reflecting short-term indecisiveness. On the weekly charts, the index is forming an inside-week candle pattern, indicating low volatility. Despite this, the index remains above its 20-day EMA (Exponential Moving Average), and the momentum indicator RSI (Relative Strength Index) is trending upwards, sustaining above the 55 level, signaling a gradual build-up of positive momentum.
Key resistance is marked at 24,860. A decisive breakout above this level could shift the trend from neutral to positive, potentially propelling the index towards 25,300. On the downside, immediate support is positioned at 24,300. A breach of this support could lead to a retest of the recent low near 23,800.
Key Resistance: 24,860, 25,300
Key Support: 24,300, 23,800
Strategy: Buy Nifty Futures above 24,860 with a stop-loss of 24,600, targeting 25,300.
Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities
We expect the rangebound movement in the Nifty 50 to persist. However, a decisive breakout above 24,750 could signal the resumption of the next upward move. The overall trend remains bullish, and any dips due to technical pullbacks should be seen as an opportunity to initiate fresh long positions.
Key Resistance: 24,800, 25,000
Key Support: 24,600, 24,500
Strategy: Buy Nifty Futures on dips near 24,650, with a stop-loss below 24,500, targeting 24,900.
Bank Nifty – Outlook and Positioning
Jatin Gedia, Technical Research Analyst, Capital Market Strategy at Mirae Asset Sharekhan
The Bank Nifty has been consolidating around the 78.6% Fibonacci retracement level (53,465) of the October–November decline. The consolidation is taking the form of a triangle pattern, which is a trend continuation pattern. We expect a breakout from this pattern on the upside, potentially retesting the previous all-time high of 54,467 over the next couple of weeks. The Bank Nifty PCR stands at 1.01, indicating a neutral stance. Overall, this consolidation appears to be a brief pause in the broader uptrend, and thus dips towards the support zone should be considered buying opportunities.
Key Resistance: 53,860, 53,900
Key Support: 53,200, 53,160
Strategy: Buy Bank Nifty Futures with a stop-loss of 53,100, targeting 54,000–54,467.
Vidnyan S Sawant, Head of Research at GEPL Capital
The Bank Nifty has been consolidating over the past few days, reflecting muted sentiment on the weekly charts. However, on the daily charts, the index continues to trade firmly above its 20-day EMA, indicating a bullish undertone. The next resistance is expected in the 53,800–54,460 range, while support is identified in the 52,600–51,400 zone. As long as the Bank Nifty sustains above the 52,600 level, the overall sentiment is likely to remain positive.
Key Resistance: 53,800, 54,460
Key Support: 52,600, 51,400
Strategy: Buy Bank Nifty Futures above 53,800 with a stop-loss of 53,450, targeting 54,460.
Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities
The Bank Nifty has been fluctuating in a range of 53,300–53,700, and consolidation is likely to continue in the next few sessions. Technically, the Bank Nifty is holding well above its key moving averages on short-term charts. However, the 54,000 mark is likely to act as a strong hurdle for the index, while the 52,500 level would provide support on any dips. The bias remains in favour of the bulls for now, and any dip in prices should be used to create fresh long positions.
Key Resistance: 53,800, 54,000
Key Support: 53,300, 53,000
Strategy: Buy Bank Nifty Futures on dips near 53,300, with a stop-loss below 53,000, targeting 53,800.
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