Nifty Trading Plan

Both the Nifty 50 and Bank Nifty recorded minor profit booking amid volatility on December 6, after rising for five consecutive days. This resulted in small bearish candlestick patterns on the daily charts. The momentum remains strong, but considering the recent healthy rally, the Nifty 50 may see some range-bound trade, with immediate support at 24,500, followed by 24,350 as the key support level. On the upside, 24,700 (20-week SMA) - 24,800 (near the 50% Fibonacci retracement) is the key hurdle. If this level is breached, 25,000 will be the next level to watch, according to experts. The Bank Nifty is expected to find support in the 53,000-52,800 zone in case of a correction. On the higher side, the index needs to hold 53,500 for up move towards 54,000, followed by the record high of 54,467.

On Friday, December 6, the Nifty 50 fell by 31 points to close at 24,678, while the Bank Nifty declined by 94 points to 53,510, despite a positive market breadth. About 1,484 shares advanced compared to 999 shares that declined on the NSE.

Nifty Outlook and Strategy

Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One

The Nifty exhibited surprising movements last week (ending December 6) but effectively handled the volatility, moving towards a more favorable position. Additionally, across-the-board buying led to a smooth transition to a bullish trend. Structurally, the index has surged almost 6 percent from recent lows and is now approaching the 50% Fibonacci retracement of the decline, which is around 24,770. Sentiment has certainly turned bullish, but a pragmatic approach is needed, with dips likely presenting opportunities for buyers, while caution should be exercised at elevated levels.

The decisive move has also negated the bearish cycle of lower highs on the daily charts, shifting the support base upwards towards 24,500 on an intermediate basis, with further sacrosanct support at 24,350-24,250 for the upcoming week. On the options front, the 24,500 strike Put and 25,000 strike Call have witnessed significant open interest concentration, indicating an intermediate trading range.

Key Resistance: 24,800, 25,000, 25,100

Key Support: 24,500, 24,350, 24,250

Strategy: Buy Nifty Futures on dips to 24,500, with a stop-loss of 24,300, and book profits near 25,000.

Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities

The Nifty index gained 2.27 percent for the week gone by. With the index consistently making higher tops and higher bottoms over the last two weeks and trading above the 20-day and 50-day SMA (Simple Moving Average), the short-term uptrend looks set to continue. We expect any corrections to hold above the 24,295 support level as the short-term uptrend continues for the time being. Our short-term upside targets are 25,000–25,200. In terms of strategy, traders/investors are advised to adopt a selective buying approach with strict stop-losses to control risk.

Key Resistance: 24,858, 25,200

Key Support: 24,495, 24,295

Strategy: Buy Nifty Futures near 24,783, with a stop-loss of 24,390, targeting 25,281.

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

The weekly chart shows that the Nifty index formed a long bullish candle, achieving a higher high and higher low compared to the previous week, and closing above the previous week's high, indicating a positive bias. The chart pattern suggests that if Nifty crosses and sustains above the 24,850 level, it could attract buying interest, pushing the index toward the 25,000–25,200 levels. Conversely, if the index falls below the 24,500 level, it may prompt selling, driving the index down toward the 24,350–24,200 levels.

For the upcoming week, we expect Nifty to trade in the range of 25,200–24,200 with a positive bias. Both the weekly strength indicator RSI and the momentum oscillator Stochastic have turned positive and are currently above their respective reference lines, further suggesting a favorable outlook.

Key Resistance: 24,800, 25,000

Key Support: 24,500, 24,350

Strategy: Buy Nifty Futures around 24,550 with a stop-loss of 24,450, targeting 24,800–24,900.

Bank Nifty - Outlook and Positioning

Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One

It was a remarkable week (ending December 6) for the Bank Nifty index, which surged 2.79% and emerged from its slumber phase. The current price zone is technically significant, aligning with both the 78.6% retracement of the previous downswing and a bearish gap near the all-time high congestion zone, making the 53,900-54,000 band crucial for the next directional move. The broader outlook remains bullish, but it will be essential to monitor how buyers navigate this key resistance area. A breakout above the 53,900-54,000 band could trigger further upside, with potential targets around 54,300-54,400 and beyond, into uncharted territory. Conversely, failure to decisively surpass this resistance zone could jeopardize the current rally and potentially erase the week's gains.

On the options front, significant piling of open interest has been seen at the 54,000 strike Call, indicating a crucial resistance zone.

Key Resistance: 53,900, 54,000, 54,400

Key Support: 52,950, 52,750, 52,500

Strategy: Buy Bank Nifty Futures on dips to 53,000, with a stop-loss of 52,750 for a potential target of 53,800-54,000.

Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities

Bank Nifty outperformed during the last week, gaining 2.79 percent. The index is now within touching distance of its all-time high. With the index consistently making higher tops over the last two weeks and trading above the 20-day and 50-day SMA, the short-term uptrend looks set to continue. We expect any corrections to hold above the 52,600 support levels as the short-term uptrend continues for the time being.

Key Resistance: 53,888, 54,468

Key Support: 52,850, 52,600

Strategy: Buy Bank Nifty Futures near 53,718, with a stop-loss of 52,800, targeting 55,000.

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

On the weekly chart, the Bank Nifty index formed a bullish candle with higher highs and lows compared to the previous week, closing above the previous week's high. This indicates a positive bias. The chart pattern suggests that if Bank Nifty crosses and sustains above the 53,700 level, it may experience buying pressure, potentially pushing the index toward the 54,000–54,300 levels. Conversely, if the index falls below the 53,150 level, it could see selling, which may drive it down to the 53,000–52,700 level.

For the upcoming week, we expect Bank Nifty to trade within the range of 54,300–52,700 while maintaining a positive bias. The weekly strength indicators, such as the RSI and the Stochastic momentum oscillator, have both turned positive and are above their respective reference lines, further suggesting a positive outlook.

Key Resistance: 53,750, 54,000

Key Support: 53,200,53,000

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