Nifty Trading Plan

The Nifty 50 closed just below the 200-day EMA (Exponential Moving Average) on November 14, posting a marginal loss of one-tenth of a percent. For the week, it dropped 2.55 percent with a long bear candle and a lower tops-lower bottoms formation, signaling weakness. Therefore, the index could extend losses to the 50-week EMA at 23,200, the next downside target. However, given the sharp downtrend in recent sessions and the index nearing the 200-day EMA, a rebound can't be ruled out, although experts believe it is unlikely to be sustainable. They advise caution until the index moves back above all key moving averages. If the Bank Nifty manages to defend the 200-day EMA on a closing basis, a bounce towards the 50,500–50,800 range is possible. However, if it fails to hold, the immediate downside target will be the August low of 49,655.

On Thursday, November 14, the Nifty 50 was down by 26 points, closing at 23,533, while the Bank Nifty outperformed the benchmark index, gaining 91 points and closing at 50,180. The market breadth improved slightly, with 1,324 shares advancing and 1,155 shares declining on the NSE.

Nifty Outlook and Strategy

Rajesh Bhosale, Technical Analyst at Angel One

Throughout the week ending November 14, the Nifty remained under pressure. This correction phase, the steepest in four years since the pandemic, saw prices fall over 10 percent from all-time highs without any significant interim rebound, breaking through multiple key support levels along the way. Last week, the index breached the crucial 23,900 support level and closed just below the 200-day SMA (Simple Moving Average), key long-term support, which failed to spark any optimism. Despite oversold conditions across various indicators hinting at a possible interim bounce, traders are advised to remain cautious and use any rebound to lighten long positions. Overhead resistance is seen at 23,900–24,000, with a stronger hurdle around the 24,350–24,500 zone, the upper range of the past three weeks. On the downside, the next immediate support is the 50-week EMA at 23,200, which aligns with the 61.8 percent Fibonacci retracement of the rally post-election results, followed by the 22,800–22,700 range.

For the upcoming weekly expiry, the ATM (at-the-money) 23,500 Put shows significant open interest, followed by the OTM (out-of-the-money) 23,000 Put, indicating strong support. On the flip side, the OTM 24,000 Call shows the highest open interest, signaling stiff resistance.

Key Resistance: 23,800, 24,000, 24,100

Key Support: 23,200, 23,000, 22,800

Strategy: While pinpointing an exact bottom is challenging, this zone could present opportunities to gradually accumulate quality stocks. However, mid-cap and small-cap segments have faced intense selling pressure, and traders are advised to avoid bottom-fishing in these areas, as further sharp declines are possible.

Mandar Bhojane, Equity Research Analyst at Choice Broking

If the Nifty sustains below the 23,500 level, it may continue to correct towards 23,200 and 23,000 in the coming days. The RSI (Relative Strength Index) is currently at 50.69 with a downward trend, suggesting further bearish momentum. Based on technical indicators and price action, the index may continue to show weakness until it reaches the major support levels. Traders are advised to avoid long positions unless the index decisively breaks above the 23,800 and 24,000 levels, as further downside risks remain. In this volatile environment, caution and strict risk management are essential.

Key Resistance: 23,800, 24,000

Key Support: 23,200, 23,000

Strategy: Consider buying on dips near the 23,200 and 23,000 levels if signs of reversal appear, targeting levels of 25,000 and 25,200. Place a stop-loss at 22,700 on a closing basis.

Preeti K Chabra, Founder of Trade Delta

At the 23,500 level, the Nifty is at a crucial juncture with a Doji formation on the daily chart, trading around the 200-day EMA. This pattern typically signals a potential reversal in a downtrend, so we expect some bounce in the coming week. To further support this view, the RSI is at 29, in oversold territory, indicating that buying may return at this level. Additionally, the Nifty is trading at the lower end of the Bollinger Band, reinforcing the potential for a rebound. Immediate support is at 23,400, with further support at the 38.2 percent Fibonacci level of 23,200. On the upside, resistance is at the recent high of 23,675, with further resistance at the 50 percent Fibonacci level of 23,800.

Key Resistance: 23,675, 23,800

Key Support: 23,400, 23,200

Strategy: Buy Nifty with a stop-loss of 23,400, targeting 23,800.

Kunal Kamble, Senior Technical Research Analyst at Bonanza

On a weekly timeframe, the Nifty 50 index is forming lower lows and lower highs, indicating negative sentiment. The price has closed below the 100-day EMA, which was acting as strong support for the index, suggesting that the market may continue its downward movement towards the 23,200 level, where the next support is located.

On the options front for the November expiry, the highest open interest is seen at the 23,000 Put strike, with fresh short buildup, while on the Call side, the highest open interest is at the 24,000 strike, where short positions have also been added. This setup suggests that market participants expect the Nifty to remain within the 23,000–24,000 range for the November series.

Since the trend is negative, a "sell-on-rally" approach should be adopted. Any bounce towards the 23,800–24,000 range should be used as a selling opportunity, targeting a move towards the 23,000 level.

Key Resistance: 23,800, 24,000

Key Support: 23,200, 23,000

Strategy: Sell on rallies near the 23,800–24,000 levels.

Bank Nifty - Outlook and Positioning

Rajesh Bhosale, Technical Analyst at Angel One

The selling pressure in the past week has significantly affected sentiment, leaving the Bank Nifty index in a vulnerable position unless a strong recovery materializes soon. The breakdown below the critical 51,100–51,000 support zone, coupled with the lack of buying interest at lower levels, paints a bleak outlook. As noted in earlier commentary, this decline aligns with a breakdown from a bearish "Head and Shoulders" pattern on the daily chart, suggesting potential for a deeper downtrend. Although we are not far from the major support at the 200-day SMA, around 49,750–49,600, the overall structure remains unconvincing.

In Bank Nifty, no major formations are observed for the monthly expiry. The highest open interest formation in OTM options is at the 49,500 Put, indicating key support, while the OTM 51,000 Call has significant open interest, signaling resistance.

Key Resistance: 50,500, 50,800, 51,000

Key Support: 49,700, 49,500, 49,000

Strategy: Traders should remain cautious, refraining from reacting to short-term momentum on the upside, and instead adopt a "sell-on-rise" approach.

Mandar Bhojane, Equity Research Analyst at Choice Broking

On the daily chart, the Bank Nifty has broken its rising trendline, making a recent low of 49,904. The index is currently supported by the 200-day EMA at 49,905, which will act as a critical support level. The RSI is trending downward at 39, indicating that bearish momentum may persist in the upcoming sessions. Moreover, the price is trading below the key EMAs of 20, 50, and 100, which further confirms the bearish outlook. This technical setup suggests increased downside potential towards the support levels of 49,200 and 48,200. Traders should avoid long positions unless the index decisively breaks above the 50,800 and 51,000 levels, as downside risks persist. In this volatile environment, maintaining caution and strict risk management is crucial.

Key Resistance: 50,800, 51,000

Key Support: 49,200, 48,200

Strategy: Consider buying on dips near the 49,200 and 48,200 levels if signs of reversal appear. Target short-term upside levels of 51,800 and 52,200, with a stop-loss at 48,000 on a closing basis.

Preeti K Chabra, Founder of Trade Delta

At 50,200, the Bank Nifty is at a critical juncture, with a Doji-like formation on the daily chart, finding support at the 200-day EMA, suggesting a potential reversal. We also see the RSI bouncing from similar levels in the recent past. The Bank Nifty is trading at the lower end of the Bollinger Band, which also points to a possible reversal.

Key Support: 49,900, 49,650

Key Resistance: 50,561, 51,200

Strategy: Buy the Bank Nifty index with a stop-loss of 49,900, targeting 51,200.