Trading Plan: Will Nifty consolidate above 25,000, Bank Nifty surpass 52,000 mark?
If the Nifty 50 decisively surpasses the 25,200-25,250 area with higher volumes, then the target of 25,500 cannot be ruled out. However, if it falls below 24,900, the October low may come into play, experts noted.
The Nifty 50 remains rangebound, with resistance at 25,200 on the higher side and support at 24,900, closing moderately lower after witnessing profit booking at the resistance level on October 15. The index formed a bearish candlestick pattern but appears to be developing an ascending triangle pattern, which is a bullish indication. Therefore, if the index decisively surpasses the 25,200-25,250 area with higher volumes, then the target of 25,500 cannot be ruled out. However, if it falls below 24,900, the October low may come into play, experts noted. The Bank Nifty is likely to climb above 52,000 soon, given the improving momentum, while support lies at 51,500.
On Tuesday, the Nifty 50 closed at 25,057, up 71 points, while the Bank Nifty extended its uptrend, rising 89 points to 51,906. On the NSE, about 1,312 shares declined, while 1,192 shares advanced.
Nifty Outlook and Strategy
Dhupesh Dhameja, Derivative Analyst at Samco Securities
The Nifty index has been rangebound over the past week, encountering strong resistance at the 25,200 level, where significant Call writing activity is observed. Conversely, it has established a strong base near the 24,900 level, supported by substantial Put writing. This has created a tug-of-war between buyers and sellers. On the hourly chart, the index is forming higher low patterns, reflecting growing buyer interest at lower levels. On the daily chart, it continues to find support at the 50-day EMA, which has proven to be a reliable support level in previous sessions.
With the index remaining confined within its trading range, a “range trading” approach is currently favourable, provided it holds above the 24,700 support level and faces resistance at 25,500.
Key Resistance: 25,200, 25,500, 25,700
Key Support: 24,900, 24,500, 24,300
Strategy: Traders can consider a Short Strangle strategy in Nifty by selling a 24,800 strike Put at Rs 76 and a 25,300 strike Call at Rs 86 for the October 24 expiry. One can place a stop-loss at Rs 2,200 of MTM, while in case of target, hold the strategy until expiry, with a maximum profit of Rs 4,053.
Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors
Nifty has been moving in a lacklustre fashion over the past few days, continuing to consolidate between the 25,240-24,920 levels on a daily basis. A breakout of this range is needed for a trending move to emerge. If Nifty manages to break above the mentioned range, we can expect a fresh rise in the index. In a nutshell, if Nifty breaks above 25,240, it could result in a fresh rise to 25,361, followed by 25,480, with immediate support at 24,920. A breach below this level will resume the negative trend back to 24,750.
Key Resistance: 25,480
Key Support: 24,920
Strategy: Long positions can be created above 25,240, with a stop-loss at 25,090 and a target of 25,480.
Riyank Arora, Technical Analyst at Mehta Equities
Nifty saw immediate support at 24,900, with major support at 24,750. The overall trend remains positive, and we are likely to witness a short-covering move that could drive the index towards 25,350 and 25,400 levels. The recent close above 25,000 reflects a bullish outlook, reinforcing favourable sentiment for continued upward momentum. Traders are advised to remain cautious but optimistic, with potential upside ahead.
Key Resistance: 25,350, 25,400
Key Support: 24,900, 24,750
Strategy: Buy above the 25,000 mark, with a stop-loss of 24,900, targeting 25,350 and 25,400.
Bank Nifty – Outlook and Positioning
Dhupesh Dhameja, Derivative Analyst at Samco Securities
The Nifty Bank index has displayed greater strength compared to the benchmark Nifty index. On the daily chart, the index has broken out of its inside bar range, signaling a shift in trend. It is now approaching the psychological level of 52,000, where significant Call writing has created immediate resistance. The index has positively retested its breakout level on the daily chart and continues to find support from the 50-day EMA, further strengthening its bullish structure. As long as the index holds above the 51,200 level, buying opportunities on dips may arise. A sustained move above 52,000 could trigger further upward momentum, targeting the next resistance at 52,500.
With the index trading above its breakout level, a “bullish” strategy is favoured, contingent on maintaining levels above 52,000 to unlock further upside potential.
Key Resistance: 52,000, 52,500, 52,700
Key Support: 51,500, 51,200, 51,000
Strategy: Traders can consider a Bull Call Ladder strategy in Bank Nifty by buying a 52,000 strike Call at Rs 429, selling a 52,500 strike Call at Rs 208, and selling a 53,000 strike Call at Rs 92 for the October 23 expiry. One can place a stop-loss at Rs 2,000 of MTM. In case of target, hold the strategy until expiry for a maximum profit of Rs 5,564, or book once MTM crosses Rs 4,000.
Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors
In the previous session, Bank Nifty retraced 38.2 percent of the recent fall. However, this pullback was very slow in nature. Currently, the index is forming a triangle formation on the shorter time frame, which occurs due to rangebound action. A breakout of this is expected in the coming sessions, which could lift prices higher towards 52,340, marking the 50 percent retracement of the fall. In summary, Bank Nifty is at a crucial juncture. A break above 52,050 will result in a retracement to 52,340 levels, while on the downside, 51,670 is a crucial support to watch.
Key Resistance: 52,500
Key Support: 51,670
Strategy: Long positions can be created above 52,050, with a stop-loss at 51,800 and a target of 52,340, followed by 52,500.
Riyank Arora, Technical Analyst at Mehta Equities
Bank Nifty is trading around 51,900, well above the immediate support level of 51,700, indicating continued bullish momentum. The index is demonstrating strength, and with the ongoing positive trend, potential targets of 52,400 and 52,500 are within reach. For existing long positions, a strict stop-loss should be maintained near 51,500 to manage downside risks while capitalizing on further gains.
Key Resistance: 52,400, 52,500
Key Support: 51,700, 51,500
Strategy: Buy above 51,900, with a stop-loss of 51,500, targeting 52,400 and 52,500.
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