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The Nifty 50 and Bank Nifty indices present compelling trading opportunities as market volatility subsides and bullish momentum persists, albeit with potential for short-term consolidation. Several expert analyses offer insightful strategies for navigating these market dynamics, emphasizing key support and resistance levels to inform trading decisions. The Nifty 50, despite a relatively flat session on June 10, remains in a healthy uptrend, consistently forming higher tops and higher bottoms over the past few weeks. Subash Gangadharan from HDFC Securities highlights that the index bounced back from a low of 24,502 last week and closed above the 20-day SMA, indicating sustained bullish sentiment. Moreover, the 14-day RSI is rising and not yet in overbought territory, further supporting the continuation of the uptrend. Gangadharan identifies key resistance levels at 25,200 and 25,400, and support levels at 25,055 and 24,960. His recommended strategy involves buying Nifty Futures between 25,000 and 25,100, with a stop-loss at 24,800 (below the 50-period MA on the 60-minute chart), targeting 25,300 and 25,500 in the next 1–2 weeks. This approach acknowledges the possibility of intermittent consolidation but leverages the overall favorable trend for the bulls. Ashish Kyal from Waves Strategy Advisors notes that the Nifty has been consolidating post a gap-up opening for the past two trading sessions, managing to close above the 25,000 mark. The India VIX, a measure of market volatility, has continued to decline, indicating reduced anxiety among traders. Kyal points out that the Nifty has not closed below the prior day’s low on the daily chart, keeping the overall undertone bullish. According to open interest (OI) data, 25,000 Call writers have not exited their positions despite the recent rally. Kyal suggests that any move above 25,170 could trigger short-covering, potentially pushing the index toward 25,361. Therefore, the trend remains bullish as long as 24,960 is protected on a closing basis. Kyal's strategy involves creating long positions in Nifty Futures above 25,170, with a stop-loss at 25,080, targeting 25,260 followed by 25,361. Preeti K Chabra from Trade Delta emphasizes the continued bullish momentum reflected in the RSI on the daily chart, which stands at 61.82. Chabra notes that the Nifty has closed above the 25,000 mark for two consecutive sessions, decisively breaching the recent resistance zone of 25,050. This sustained move above a key level provides confidence to the bulls. In the weekly options data, significant unwinding was observed in in-the-money (ITM) Call options, further reinforcing the market’s bullish undertone. Chabra recommends a ‘buy on dips’ strategy, advising traders to look for opportunities to accumulate on intraday or short-term corrections, with the broader trend remaining positive. Her strategy involves buying Nifty Futures near the cash price of 25,080, targeting 25,212 followed by 25,639, with a stop-loss at 25,000. These diverse perspectives converge on a common theme: the Nifty 50 is poised for further gains, provided key support levels are maintained. The recommendations to buy on dips and strategically place stop-losses reflect a balanced approach, acknowledging the inherent risks associated with market volatility while capitalizing on the prevailing bullish trend.
The Bank Nifty, similarly, presents a bullish outlook, albeit with nuances related to recent profit-taking and potential consolidation. Subash Gangadharan from HDFC Securities highlights that the Bank Nifty remains in a strong uptrend, having surged sharply last week to close at a new all-time high. The index is trading above key moving averages, and momentum indicators like the 14-week RSI are rising and not overbought, suggesting further upside potential. Gangadharan identifies key resistances at 57,050 and 57,500, and supports at 56,200 and 56,000. His recommended strategy involves buying Bank Nifty Futures at 56,580 with a stop-loss at 56,000, targeting 57,500. This strategy aligns with the overall bullish trend and aims to capture further gains as the index continues to climb. Ashish Kyal from Waves Strategy Advisors notes that the Bank Nifty has been making consecutive record highs, fueled by the RBI’s unexpected interest rate and CRR cuts, which boosted banking and NBFC stocks. However, in the previous session, some profit booking was observed after the sharp rally, and prices attempted to fill the gap. The session ended near the gap support zone of 56,500–56,600. Kyal emphasizes that a break above 56,800 followed by 57,040 is now required to resume buying. The PCR (Put-Call Ratio) for Bank Nifty stands at 0.95, which is still within a comfortable range and not overbought, indicating room for further upside. Kyal’s summary indicates that the Bank Nifty broke out of a consolidation phase with a sharp rally last week. Some profit-taking was seen in the previous session. A break below 56,550 could lead to extended profit booking, while a breakout above 56,800 could reignite buying interest and drive the index toward fresh highs. His strategy involves creating long positions in Bank Nifty Futures above 56,800 with a stop-loss at 56,550 and targets of 57,050 followed by 57,300. Preeti K Chabra from Trade Delta observes that the RSI for Bank Nifty stands at 66.03, suggesting signs of exhaustion, which may result in short-term consolidation or minor corrections. From the derivatives perspective, the monthly options chain shows unwinding in both in-the-money Call and Put options, reinforcing the view of profit booking at higher levels. Chabra anticipates some near-term consolidation but maintains that the broader trend remains “Buy on Dips.” Traders should look to accumulate during declines, with 56,500 acting as immediate support. She believes that any healthy pullback may offer an opportunity to participate in the ongoing uptrend. Her strategy involves buying Bank Nifty Futures near the cash price of 56,500 with a stop-loss at 56,300, targeting 57,050 followed by 57,800.
The collective analysis suggests that both the Nifty 50 and Bank Nifty offer opportunities for strategic trading, but caution is advised given the potential for short-term volatility and profit booking. Traders should carefully consider the recommended support and resistance levels, employ stop-loss orders to manage risk, and adopt a 'buy on dips' approach to capitalize on market corrections. The strategies outlined by various experts emphasize the importance of technical analysis, open interest data, and momentum indicators in making informed trading decisions. By integrating these insights, traders can navigate the complexities of the market and potentially profit from the anticipated upward trajectory of both indices. It's crucial to acknowledge the disclaimer provided, reminding users that these views and investment tips are those of the experts and not of Moneycontrol or its management. Investors are advised to consult with certified financial experts before making any investment decisions, as market conditions can change rapidly, and individual circumstances may warrant a personalized approach. The analysis underscores the dynamic nature of financial markets and the necessity for continuous monitoring and adaptation of trading strategies. The decline in India VIX further supports the stability of the indices, meaning the risk appetite is higher, and the bullish sentiment is expected to continue barring any unforseen black swan events. Overall, the outlook remains optimistic as long as the suggested support levels hold. While these insights provide a general framework for trading, individual investors must conduct their own thorough research and assess their risk tolerance before implementing any specific strategy. The integration of technical analysis with fundamental understanding of market dynamics is essential for navigating the complexities of financial markets. Therefore, a balanced approach combining expert analysis and independent due diligence is recommended for maximizing potential returns while mitigating risks.
Source: Trading Plan: Will Nifty 50 climb above 25,200, Bank Nifty hold 56,200 as VIX enters comfort zone?