Nifty Trading Plan
The Nifty 50 seems to have regained momentum, rising nearly 0.7 percent to close decisively above the 25,000 mark, with further declines in volatility on October 14. Therefore, the index may march toward 25,300 in the immediate term, followed by 25,500 (the midpoint of the Bollinger Band). However, in case of a correction, it may find support at 25,000 first, and then at 24,900. The Bank Nifty climbed above the 10-week EMA as well as the 20-week SMA; hence, the immediate target maybe 52,000, followed by 52,500 (the midpoint of the Bollinger Band on daily charts). On the downside, 51,000 serves as strong support, experts said.
On Monday, the Nifty 50 jumped 164 points to 25,128, while the Bank Nifty climbed 645 points, or 1.26 percent, to reach 51,817. On the NSE, about 1,288 shares declined, while 1,251 shares advanced.
Nifty Outlook and Strategy
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities
The Nifty retraced 61.8 percent of the previous bounce, during which it consolidated for three trading sessions before providing a breakout on the upside. The momentum indicator MACD (Moving Average Convergence Divergence) is in sell mode on both daily and weekly charts; hence, this bounce currently appears to be a contra trade, representing a bounce in the ongoing downtrend. On the upside, the index can retrace up to 25,300 and 25,500 levels in its third leg of the bounce.
In terms of derivatives data, the 25,000 strike Put has the highest open interest, indicating immediate support, while the 25,500 strike Call has the highest open interest, marking immediate resistance. Therefore, the range for the index is seen between 25,000 and 25,500 levels. The index is trading above the maximum pain level of 25,100, although it is below the modified maximum pain level of 25,352, establishing this as the short-term range. There was good unwinding on the Call front from 24,900 to 25,050 levels, along with significant addition at the 25,000 and 25,100 Put strikes. The PCR (Put Call Ratio) remains at 0.70, suggesting there is still room for the index to bounce back.
Key Resistance: 25,300, 25,500
Key Support: 25,100, 25,000
Strategy: Buy Nifty with a stop-loss below 25,000, targeting 25,300 and 25,500.
Mehul Kothari, DVP – Technical Research at Anand Rathi
The week kicked off with a strong performance for domestic markets, following positive to flat global cues. The daily chart shows a Morning Star formation, indicating further upside in the coming sessions. This bullish view would be negated if the index drops below 24,900, while the Nifty has the potential to test the 25,500 mark on the upside. The daily RSI (Relative Strength Index) is also turning from the support level of 40.
Key Resistance: 25,500, 25,600
Key Support: 24,900, 24,750
Strategy: Buy Nifty Futures at around 25,200, with a stop-loss of 25,000, targeting 25,500 to 25,600.
Pravesh Gour, Senior Technical Analyst at Swastika Investment
On the technical charts, the Nifty has closed above 25,100, with immediate support levels at 25,000, 24,900, and 24,750. A break below 24,750 could lead to the next support at 24,470. Immediate resistance is at 25,235, followed by hurdles at 25,330 and 25,488.
Key Resistance: 25,235, 25,330, 25,488
Key Support: 25,000, 24,900, 24,750
Strategy: Consider buying on dips near 24,900, with a stop-loss at 24,750, targeting 25,330.
Bank Nifty - Outlook and Positioning
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities
The Bank Nifty has provided a breakout from the consolidation of the past three trading sessions, indicating the continuation of the contra trend, which is likely to occur in the Nifty as well. The Bank Nifty has retraced 38.2 percent of the previous fall (51,907 level), and above this, it is likely to retrace to approximately 52,390, which is the 50 percent retracement level. On the downside, immediate support levels are at 51,400 and 51,000; as long as these levels are held, the short-term trend remains positive for a bounce back.
According to derivatives data, there was significant Call unwinding from 51,000 to 51,700 levels, which has caused the PCR to bounce above 1, currently standing at 1.01, thus entering the bullish zone. Now, 51,500 and 51,000 levels are immediate support, as there is maximum Put open interest at these strikes. The 52,000 strike has the highest Call open interest, marking near-term resistance. The index is trading above 51,700, which is the maximum pain level, as well as above the modified maximum pain level of 51,560, making these near-term supports.
Key Resistance: 52,000, 52,390
Key Support: 51,400, 51,000
Strategy: Buy Bank Nifty with a stop-loss below 51,400, targeting 52,000 and 52,390.
Mehul Kothari, DVP – Technical Research at Anand Rathi
The Bank Nifty has begun its upward trajectory. We are now witnessing a range breakout on lower time frames along with a positive crossover in the daily RSI. This could propel the index back toward the 52,500 to 53,000 levels in the coming sessions. The bullish view would be negated below the 51,000 mark.
Key Resistance: 52,500, 53,000
Key Support: 51,500, 51,000
Strategy: Buy Bank Nifty Futures on dips near 51,750, with a stop-loss of 51,250, targeting 52,750.
Pravesh Gour, Senior Technical Analyst at Swastika Investment
The key index to monitor closely is the Bank Nifty, which recently closed above the critical resistance level of 51,500. A decisive move above this could spark a significant short-covering rally toward 52,550. On the downside, the 50-DMA serves as immediate support at around 51,500, while the 100-day moving average (DMA) of around 51,000 provides a more critical support level.
Key Resistance: 52,300, 53,000
Key Support: 51,535, 51,000
Strategy: Consider buying on dips near 51,500 to 51,535, with a stop-loss of 51,000, targeting 52,500.
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