Nifty Trading Plan

The Nifty 50 and Bank Nifty showed strong recovery from their day's lows and closed higher on December 13, forming bullish candlestick patterns with long lower shadows on the daily charts, indicating healthy buying interest at lower levels. Hence, if the Nifty 50 manages to hold above 24,700, the next key level to watch is 25,000. However, if the index sustains below this level, it may find support at 24,500, according to experts. For Bank Nifty, it needs to climb above 53,800 for a rally towards 54,000 and then record highs, while 53,100 is likely to act as a support zone.

On Friday, December 13, the Nifty 50 rallied 220 points (0.9%) to close at 24,768, while the Bank Nifty jumped 367 points to 53,584, despite the market breadth favoring the bears. A total of 1,432 shares declined compared to 1,056 advancing shares on the NSE.

Nifty Outlook and Strategy

Rajesh Bhosale, Technical Analyst at Angel One

The Nifty 50 saw its fourth consecutive week of bullish movement. While the weekly percentage change may not have been significant, the strong buying at lower levels on Friday suggests the bulls may continue to dominate. On the daily chart, prices closed near the 50% retracement of the entire decline from the all-time high of 26,277 to the recent low of 23,263. Given the momentum, we anticipate that prices could continue their upward move next week, potentially testing 25,000 and the 61.8% retracement around 25,125–25,200.

On the downside, 24,650–24,600 should act as immediate support, with any dips likely to attract buying interest. The critical support level on a closing basis remains at 24,500. While the market has seen a solid recovery from recent lows, the ongoing "Santa Rally" could present stock-specific opportunities. It’s crucial to focus on identifying the next performing theme for potential gains during this period.

Key Resistance: 25,000, 25,200

Key Support: 24,600, 24,500

Strategy: We expect positive momentum to continue in the coming week, with the Nifty testing levels of 25,000–25,200. Any intra-week dip should be considered a buying opportunity.

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

On the weekly chart, the Nifty 50 has formed a small bullish candle with a long lower shadow, indicating buying interest around the 20-day SMA placed at 24,214. The chart pattern suggests that if the Nifty crosses and sustains above the 25,000 level, it could lead to further buying, propelling the index towards the 25,200–25,500 range. However, if the index breaks below the 24,600 level, it would likely trigger selling, pushing the index towards 24,500–24,200.

For the week, we expect the Nifty to trade within the range of 25,500–24,200 with a mixed bias. The weekly strength indicator RSI (Relative Strength Index) remains above its reference line, signaling a positive bias.

Key Resistance: 24,800, 25,000

Key Support: 24,500, 24,350

Strategy: Buy Nifty Futures around 24,600 with a stop-loss of 24,450, targeting 24,800–24,900.

Kushal Gandhi, Technical Analyst at StoxBox

In terms of market breadth, the percentage of stocks trading above the 50-day and 200-day moving averages has seen a significant recovery, now operating above the median threshold, which is a positive development and indicates increasing bullish strength. However, the percentage of stocks trading above the 10-day MA is lower compared to those above the 20-day MA. This negative crossover reflects comparatively weaker momentum in the intermediate trend.

The zone of 24,780–25,000 serves as a critical resistance level, marking the neckline of the Inverted Head and Shoulders pattern, below which the Nifty experienced a sharp correction beginning in late October. Therefore, we anticipate the index will gradually move towards the 25,000–25,200 mark, albeit with relatively lesser momentum.

Key Resistance: 24,800, 25,000

Key Support: 24,130

Strategy: The Nifty is projected to move north, albeit with relatively lower momentum. Given this, we recommend a stock-specific approach, focusing on companies that exhibit stronger relative strength compared to the broader market in the coming week.

Bank Nifty - Outlook and Positioning

Rajesh Bhosale, Technical Analyst at Angel One

The technical structure of Bank Nifty has undergone some dramatic shifts over the past few days. With the index moving back above the crucial 53,300 level, the outlook is now for the index to move towards the 53,850 level. Thereafter, it will be important to closely monitor the index's behavior near the 53,800–54,000 resistance. A sustained move beyond this zone would trigger a rally toward all-time highs (54,467), and then into uncharted territory. The strong recovery from lower levels reaffirms the importance of the 52,750–52,500 zone as a robust support, where buyers stepped in aggressively.

Key Resistance: 54,000, 54,500

Key Support: 53,100, 52,800

Strategy: The undertone remains positive, with a move beyond 53,800 likely to trigger further momentum in this space. Keep a close watch on this critical level, as broad-based buying could emerge above it.

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

Bank Nifty closed at 53,584 with a gain of 74 points on a weekly basis. The index has formed a small bullish candle on the weekly chart with a long lower shadow, indicating buying at lower levels. The chart pattern suggests that if Bank Nifty crosses and sustains above the 53,800 level, it would trigger further buying, pushing the index towards the 54,000–54,500 levels. However, if the index breaks below the 53,400 level, it would likely result in selling, pushing the index towards 53,000–52,700.

For the week, we expect Bank Nifty to trade within the range of 54,500–52,700 with a mixed bias. The weekly strength indicator RSI remains above its reference line, indicating a positive bias.

Key Resistance: 53,750, 54,000

Key Support: 53,200, 53,000

Strategy: Buy Bank Nifty near 53,350 with a stop-loss of 53,100, targeting 53,900–54,200.

Kushal Gandhi, Technical Analyst at StoxBox

The Nifty Bank index faces immediate resistance in the zone of 53,840–53,560, marking the gap-down from September 30. A decisive reclaiming of this resistance zone on a closing basis is expected to attract further bullish momentum. We anticipate that private banks will outperform PSU banks, with ICICI Bank and HDFC Bank expected to lead the index, as they continue to demonstrate characteristics of genuine market leaders within the sector.

Key Resistance: 53,850

Key Support: 52,580-52200

Strategy: Upon successfully reclaiming the resistance zone, the index is anticipated to move higher. We recommend adopting a stock-specific approach within sectors that demonstrate stronger relative strength compared to their peers and the broader market.