Trading Plan: Will record high run continue in Nifty 50, Bank Nifty?

Nifty, Bank Nifty Trend

The market rebounded sharply, climbing decisively above 24,200 to record a new high on the Nifty 50, although a Doji pattern formation was observed at the top on July 3. Consolidation can't be ruled out, but if the index sustains 24,200, then 24,500 is the next level to watch, with a crucial support zone of 24,000-23,900. The Bank Nifty needs to sustain above 53,000 for the next target zone of 53,500-54,000, while 52,000 would be crucial support, experts said.

On Wednesday, both indices recorded new all-time closing highs. The Nifty 50 rallied 163 points or 0.67 percent to 24,286.50, and the Bank Nifty jumped 921 points or 1.77 percent to 53,089. About 1,479 shares advanced, and 868 shares declined on the NSE.

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Nifty Outlook and Strategy

Jatin Gedia, Technical Research Analyst, Capital Market Strategy at Sharekhan by BNP Paribas

On the daily charts, we can observe that the Nifty has broken out of a sideways consolidation on the upside and is now heading towards the 24,370 – 24,500 zone. A trailing stop-loss for long positions should be maintained at 24,050. A negative divergence on the hourly time frame is a cause for concern; however, until prices show decisive weakness, the index will continue to ride the up move. The gap area formed in the range of 24,200 – 24,130 shall act as a crucial support zone, and in case of a dip, it should be used as a buying opportunity.

Key Resistance: 24,370, 24,500

Key Support: 24,200, 23,130

Strategy: Buy on dip with a support at 24,200 and a target of 24,370 - 24,500.

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Vidnyan S Sawant, Head of Research at GEPL Capital

On the weekly charts, Nifty has surged sharply by approximately 1,000 points from the 23,350 mark since last week, consistently hitting new all-time highs with higher highs and higher lows. This pattern highlights the index's robust positive momentum. On the daily charts, the short-term base for Nifty has risen to the 23,900 level, indicating the strength of the bullish trend. The optimistic outlook is reinforced by the RSI (Relative Strength Index) momentum indicator, which remains above 65 and is trending upward, signaling increasing positive momentum. We anticipate Nifty will continue its bullish trend as long as it stays above the 23,900 mark. In the near term, resistance levels are projected at 24,600, with additional resistance likely at 24,800.

Key Resistance: 24,600, 24,800

Key Support: 23,900, 23,600

Strategy: Buy Nifty at CMP or on a dip until 24,000 for a target of 24,600 and with a stop-loss of 23,900.

Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities

The shift in sentiment has once again favoured long trades in the market as the underlying trend of the Nifty 50 remains positive. Moving forward, the trend might remain strong in the near term as long as it stays above 24,000. On the higher end, the index might move towards 24,500 levels as well.

Key Resistance: 24,400, 24,500

Key Support: 24,200, 24,100

Strategy: Buy on dips near 24,250, with a stop-loss below 24,150, for a target of 24,500.

Bank Nifty - Outlook and Positioning

Jatin Gedia, Technical Research Analyst, Capital Market Strategy at Sharekhan by BNP Paribas

Bank Nifty, after a four-day correction, witnessed a gap up and thereafter consolidated. There are divergent signals from the daily and hourly time frames momentum indicators, which generally lead to consolidation. The range of consolidation is likely to be 53,300 – 52,000 from a short-term perspective. The key heavyweights of the index have recovered after correcting for four days; however, we expect a consolidation in most of them and hence our outlook for the Bank Nifty remains range-bound with a positive bias. On the upside, the target level is 53,660 from a short-term perspective.

Key Resistance: 53,660, 53,800

Key Support: 52,500, 52,200

Strategy: Buy on dip with a support of 52,700 – 52,600 area, for a target of 53,300 – 53,660 zone.

Vidnyan S Sawant, Head of Research at GEPL Capital

This week, Bank Nifty has continued its bullish momentum, reaching a new all-time high at the 53,256 level. On the daily charts, Bank Nifty has formed a Change in Polarity (CIP) pattern at the 52,000 mark and has risen again, demonstrating strong strength for the medium to long term. The Relative Strength Index (RSI) is above 70 and trending upward, indicating strengthening positive momentum. Our analysis suggests that as long as Bank Nifty remains above the 52,000 mark, it is likely to maintain its bullish trajectory and potentially move towards the 54,000 and subsequently 55,500 levels.

Key Resistance: 54,000, 55,500

Key Support: 52,000, 51,130

Strategy: Buy Bank Nifty at CMP or on a dip until 52,450 for a target of 54,000 and a stop-loss of 52,000.

Shitij Gandhi, Senior Technical Research Analyst at SMC Global Securities

The Bank Nifty index is trading in a strong uptrend with higher high and higher low formations on the daily chart. The immediate support now stands at 52,600, and a dip towards this support would be an ideal opportunity to initiate a fresh long position. On the higher side, it is likely to keep its bullish momentum and is expected to move towards 53,800 levels as well.

Key Resistance: 53,500, 53,800

Key Support: 52,800, 52,500

Strategy: Buy Bank Nifty on dips near 52,800, with a stop-loss below 52,400, and a target of 53,500

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