Nifty Trading Plan

The Nifty 50 remained strong for another session and outperformed the Bank Nifty on December 2. The index stayed above short-term moving averages (10-20-day EMA) with a higher top-higher bottom formation and a positive bias in the momentum indicator RSI (Relative Strength Index). Hence, the index is likely to sustain its upward rally and seems to be moving toward the 50-day EMA (Exponential Moving Average) at 24,364, the immediate resistance, followed by 24,550 as the next hurdle, despite expected consolidation. The Bank Nifty is likely to be rangebound and volatile ahead of the RBI interest rate decision, with resistance at 52,600 and support at 51,600, according to experts.

On Monday, December 2, the Nifty 50 jumped 145 points to 24,276, while the Bank Nifty rose 53 points to 52,109, with market breadth favoring bulls. About 1,620 shares gained compared to 912 declining shares on the NSE.

Nifty Outlook and Strategy

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

The Nifty 50 has immediate support at its recent lows, which were formed on the November expiry day, i.e., 23,873 levels. The momentum indicator MACD (Moving Average Convergence Divergence) continues to remain in the buy mode, and the index seems to have completed the right shoulder of an Inverse Head and Shoulders pattern, which is a bullish reversal pattern. The breakout of the same will be confirmed above the 24,354 level, and the conservative target comes to 24,570, i.e., the 61.8 percent Fibonacci retracement of the previous up move, and 25,000, which is the equality target of the previous up move. Also, above 24,570, the 50 percent Fibonacci retracement level is 24,800, which is higher than the conservative target.

The weekly PCR (Put Call Ratio) is 1.18, which is positive, and the monthly PCR is 1.27, indicating that, in the short term, the bulls have the upper hand. Hence, there is a higher possibility of a bounce-back. The 24,000 strike has the highest Put open interest on both the weekly and monthly data, whereas 25,000 has the highest Call open interest on both the weekly and monthly data, so that is the immediate resistance for the December series. The range for the index is 24,000 to 25,000 levels. The India VIX has cooled down from its higher levels; however, it has not fallen sharply, and as of now, it has gone sideways, which further makes a strong case for a bounce-back.

Key Resistance: 24,360, 24,570

Key Support: 24,000, 23,873

Strategy: Buy Nifty Futures at the current market price (CMP) of 24,276, with a stop-loss of 23,950, targeting 24,570 and 24,800.

Anshul Jain, Head of Research at Lakshmi Shree Investments

For the second consecutive day, Nifty has carved an inside bar within last Thursday’s price action, signaling consolidation with a bullish undertone. Both inside bars reflect strong market sentiment as the index inches closer to a Cup-and-Handle pattern on the daily chart, with a neckline at 24,355.

Technical indicators suggest that a decisive breakout could occur before the weekly expiry, propelling Nifty to test the 24,600 mark in the near term. Traders should keep a close watch on 24,295, as a move above this level would confirm the breakout towards 24,355.

The formation of the Cup-and-Handle pattern—a classic bullish continuation setup—reinforces the possibility of sustained upward momentum. With favorable conditions aligning, the index is poised to deliver exciting opportunities for traders in the coming sessions. Will this bullish pattern lead the charge? Eyes are set on the breakout levels!

Key Resistance: 24,295, 24,355

Key Support: 24,195, 24,115

Strategy: The Nifty is trading near 24,275, and dips towards 24,225 in the session ahead should be viewed as buying opportunities. With a target of 24,355, the setup offers a favorable entry point for traders looking to capitalize on the impending breakout.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

The Nifty has given a smart recovery, with 24,000-23,800 acting as a key demand zone. The 24,500 level is the immediate and critical hurdle, followed by 24,750 as the next resistance. A break below 24,100 could lead to a decline toward the crucial support at 23,800.

Key Resistance: 24,500, 24,750

Key Support: 23,927, 23,800

Strategy: Consider buying Nifty Futures above 24,500, with a stop-loss of 24,000, targeting 24,750.

Bank Nifty - Outlook and Positioning

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

The Bank Nifty has gone sideways since the end of the November series, mainly due to profit booking in HDFC Bank from the higher levels. HDFC Bank is one of the highest-weighted stocks in the Bank Nifty. There are multiple swing resistances around 52,350 levels on a closing basis, so a close above the same may help the index inch towards 53,000 and thereafter towards 53,500 levels. On the lower side, if the index has to fill the gap, it may fall until the 51,271 level, where it may find overall support.

As far as derivatives data is concerned, the PCR is at 0.89, which is below 1, hence bearish. On the lower side, the 51,000 strike has immediate support, whereas 53,000 and 54,000 strikes have the highest Call open interest. This week is critical from the point of view of the RBI monetary policy; hence, the index is likely to be volatile and trade within a range until the policy outcome. The possibility of an upward breakout is higher, so if the index moves beyond 53,000 before the policy, it can be considered a positive expectation.

Key Resistance: 53,000, 54,000

Key Support: 52,000, 51,000

Strategy: Buy Bank Nifty Futures on dips near 51,500, with a stop-loss of 50,900, targeting 53,000 and 54,000.

Anshul Jain, Head of Research at Lakshmi Shree Investments

The Bank Nifty has crafted a Hammer on the daily chart, decisively rejecting the past two days' lows and setting the stage for a potential bear trap. This bullish reversal pattern suggests that short-covering may ignite at 52,200, pushing the index to 52,600 in its initial move.

Adding to the bullish narrative, Bank Nifty is forming a classic Cup-and-Handle pattern on the daily timeframe, with a critical neckline at 52,600. A breakout above this level could pave the way for the index to test 53,200, marking a significant upward trajectory.

Traders should closely monitor 52,200 for signs of short-covering momentum, as it could signal the beginning of a robust rally. The combination of a Hammer pattern and the Cup-and-Handle formation hints at strong buying interest, potentially driving Bank Nifty to new highs in the near term. The breakout journey could be just beginning!

Key Resistance: 52,200, 52,600

Key Support: 51,800, 51,500

Strategy: Traders should look to initiate positions above 52,200 to ride the expected short-covering rally towards 52,600. A decisive move above 52,600 could confirm a Cup-and-Handle breakout, opening up the potential for 53,200.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

Bank Nifty remains relatively strong, with 52,600 acting as a key hurdle. A breakout above 52,600 could push it toward the next target of 53,300. The 52,000-51,600 zone serves as an immediate support zone, while 51,300 is the next major support.

Key Resistance: 52,600

Key Support: 52,000, 51,600

Strategy: Consider buying Bank Nifty Futures above 52,600, with a stop-loss of 52,000, targeting 53,300.