Trading Plan: Will Nifty 50 hold 23,300, Bank Nifty defend 56,000 amid consolidation?

Fresh updates from the financial markets indicate that The Nifty 50 is likely to stay in a consolidation phase with range-bound trading until it either breaks above 23,600 or falls below the crucial backing level of 23,000. Immediate backing is noted at 23,200, while resistance is placed at 23,500. In the meantime, the Bank Nifty needs to defend the 56,000 level, as a break below it could open the door for a slide towards 55,700, the previous week’s low. On the upside, the 56,700-57,000 zone is likely to act as resistance, as per specialists.

On September 22, the Nifty 50 declined 85 points, or 0.36 percent, to 23,329, while the Bank Nifty eased 255 points, or 0.45 percent, to 56,216. Market breadth remained in favour of the bears, with around 1,805 shares declining compared with 1,448 advancing shares on the National Stock Exchange. Nifty Outlook and Strategy

Ashish Kyal, Founder and CEO of Waves Strategy Advisors

Nifty took backing from the major price-action zone near 23,100 in the previous week and reversed elevated, witnessing a relief surge of more than 350 points. That stated, the recovery has been gradual in nature. Prices have been protecting the previous day’s low on a closing basis, suggesting some buying interest is emerging at softer marks.

In the previous session, the index opened elevated but failed to sustain above the 23,480–23,500 zone and reversed sharply to close at 23,329. Despite Brent crude easing below $100 a barrel, Nifty remained under selling pressure.

Nifty is at a crucial inflection point. A move above 23,480 could extend the pullback further, while a move below 23,280 could resume the sell-off towards the 23,100 level. Key Resistance: 23,700 Key Backing: 23,100

Strategy: Buy Nifty Futures if the index breaks above 23,480, with a stop-loss at 23,380 and targets of 23,580, followed by 23,700.

Rajesh Dashrath Bhosale, Fund Manager – Advisory at Renaissance

Nifty has been in bounce-back mode since last week; that stated, the index ended its four-session winning streak by forming a bearish candle that engulfed the previous candle. Technically, prices keep stay in a consolidation phase, with Nifty stuck within the range of the large trading-range candle formed last Tuesday.

The elevated end of this candle, around 23,600, coinciding with the 20-DEMA and the previous backing-turned-resistance zone, stays a key hurdle. Until Nifty sustains above this level, traders should stay selective on the long side. A decisive move above 23,600 could improve the short-term setup and provide further momentum to the ongoing recovery.

On the flip side, the low of the afore-mentioned candle, around 23,100, along with the June swing low near 23,000, forms a crucial backing zone. We stay hopeful that these marks are likely to stay defended; hence, a buy-on-dips approach can be maintained as long as this backing zone holds. A decisive break below 23,000, that stated, could negate the current recovery structure and bring renewed selling pressure.

Nifty Resistance: 23,500, 23,600

Nifty Backing: 23,100, 23,000

Strategy: Buy Nifty Futures around 23,250, with a stop-loss of 23,100 and targets of 23,550 and 23,700.

Preeti K Chabra, Founder of Trade Delta

Nifty 50 formed a bearish candle after witnessing earnings booking near the key resistance zone of 23,500. The index has additionally closed below its upward-sloping channel, indicating a loss of bullish momentum.

It is at present trading well below its 20-day SMA at 23,703 and 40-day EMA at 23,832, reflecting continued dominance by the bears in the near term.

From a Fibonacci perspective, Nifty is trading between the 61.8 percent retracement level of 23,172 and the 50 percent retracement level of 23,478, based on the surge from 22,182 to 24,774. These marks are likely to act as important near-term backing and resistance, respectively.

The RSI stands at 34.8 and stays above its signal line, suggesting the possibility of a recovery from softer marks despite the weak broader setup. In the meantime, slight unwinding in in-the-money Put positions indicates mild bearish sentiment.

Overall, Nifty may consolidate in the near term. That stated, declines towards key backing marks could offer buying opportunities. As a result, a buy-on-dips strategy stays preferable, provided backing marks hold.

Key Resistance: 23,478, 23,571

Key Backing: 23,285, 23,172

Strategy: Consider buying Nifty Futures near the cash reference level of 23,285 for a target of 23,478, followed by 23,571, with a stop-loss of 23,172.

Bank Nifty – Outlook and Positioning

Ashish Kyal, Founder and CEO of Waves Strategy Advisors

Bank Nifty keeps stay in a consolidation phase, with prices largely moving within the 56,000–56,700 range during the past few sessions. In the previous session, the index initially attempted to move elevated and tested the 56,650–56,700 zone but failed to sustain these marks and subsequently eased towards the softer end of the day’s range. This resulted in the formation of a red candle with an upper shadow on the daily chart, highlighting selling pressure emerging at elevated marks.

Interestingly, prices keep stay within the high and low of the September 15 candle, keeping the broader structure range-bound. The main 54-day Time Cycle is starting the week ahead, making the coming sessions important.

Bank Nifty keeps move in a trendless manner, with prices stuck within a narrow range. A sustained move above 56,700 could trigger a fresh pullback towards the 57,000 mark. On the other hand, a move below 56,000 could indicate that the recent recovery was only a temporary pullback and that selling pressure is once again gaining control. Key Resistance: 57,250 Key Backing: 56,000

Strategy: Long positions can be created if Bank Nifty breaks above 56,700, with a stop-loss at 56,400 and targets of 57,000, followed by 57,250.

Rajesh Dashrath Bhosale, Fund Manager – Advisory at Renaissance

Bank Nifty keeps stay in a consolidation phase, forming a series of small-bodied candles on the daily chart. For the last couple of weeks, prices have remained stuck within the 55,700–57,000 range, with key moving averages additionally converging closely, indicating a lack of clear directional momentum.

The next directional move is likely to emerge only on a decisive breakout from this range. A sustained move above 57,000 could trigger fresh momentum and propel Bank Nifty towards the 58,000–58,500 zone. On the flip side, a decisive break below 55,700 could result in a fresh leg of selling pressure in the near term.

Traders are advised to keep a close tab on these marks and structure their trades accordingly, as the eventual range breakout is likely to provide greater clarity on the near-term trend.

Key Resistance: 56,800, 57,000

Key Backing: 55,700, 55,000

Strategy: Buy Bank Nifty Futures around 56,800, with a stop-loss of 56,100 and a target of 58,000, or sell Bank Nifty Futures below 55,700, with a stop-loss of 56,400 and a target of 55,500.

Preeti K Chabra, Founder of Trade Delta

Bank Nifty witnessed selling pressure near the 56,700–56,750 resistance zone and closed with a negative bias. The index is trading below its 20-day SMA of 56,905 and 40-day EMA of 56,969, keeping the near-term trend under pressure.

On the Fibonacci scale, Bank Nifty closed between the 38.2 percent retracement level of 56,443 and the 50 percent retracement level of 55,744, measured from the surge between 52,783 and 58,706. These marks are anticipated to act as key near-term resistance and backing, respectively.

The RSI stands at 41.6 and has eased below its signal line, indicating fading momentum and a short-term bearish bias. Derivatives data additionally reflects wary sentiment, with monthly options witnessing unwinding in at-the-money Put positions.

Overall, the broader outlook stays mildly negative. A sell-on-climb strategy is as a result preferable, particularly on rebounds towards the 56,700–56,750 resistance zone.

Key Resistance: 56,700, 57,000

Key Backing: 56,100, 55,800

Strategy: Consider selling Bank Nifty Futures near the cash reference level of 56,700 for a target of 56,100, followed by 55,800, while maintaining a strict stop-loss of 57,000.