Trading Plan: Can Nifty 50, Bank Nifty defend Friday’s low?

Fresh updates from the financial markets indicate that With the technical setup remaining weak and the bearish undertone reinforced by the broader macro backdrop, the market is anticipated to stay wary, with 23,000 — close to Friday's low of 23,020 — likely to be a crucial level for further direction. A decisive break below 23,000 could trigger panic selling and drag the Nifty 50 towards 22,800-22,700. On the upside, the 23,200-23,300 zone will be the key area to watch. In the meantime, the Bank Nifty needs to defend 55,300, near its weekly low, for a potential move towards 55,900-56,200. A break below 55,300, that stated, could open the door for a slide towards 55,000-54,800, experts stated.

On September 25, the Nifty 50 rebounded 77 points, or 0.34 percent, to 23,141, while the Bank Nifty rose 142 points, or 0.26 percent, to 55,580. Market breadth improved, with around 1,704 shares advancing against 1,537 declining shares on the NSE. Nifty Outlook and Strategy

Osho Krishan, Chief Manager – Technical & Derivative Research at Angel One

The technical setup stays extremely weak, with the weekly RSI offering limited backing, while the broader macro backdrop keeps reinforce the bearish undertone. Historically, the Nifty 50 has remained in a softer-bottom formation. Even when the 14-day RSI has rebounded from oversold territory, the recovery has yet to translate into meaningful price resilience.

On the marks front, 23,000 stays a key backing level and a critical level for the bulls to defend. A decisive breakdown below this mark could accelerate the slide towards the 22,800-22,700 zone over the intermediate term. On the upside, the bearish gap around 23,280-23,350 is anticipated to act as an immediate hurdle and may cap any rebound attempt. Beyond this, the sacrosanct resistance zone at 23,500-23,550 stays crucial.

Only a decisive and sustained move above this range could signal a meaningful reversal in the prevailing downtrend and offer some respite from the ongoing selling pressure.

Key Resistance: 23,280, 23,500

Key Backing: 23,000, 22,700

Strategy: Sell Nifty Futures near 23,200-23,250, with a stop-loss at 23,350 and book earnings near 23,000-22,800.

Jatin Gedia, Technical Research Market observer, VP, Derivatives & Technical Research at Teji Mandi

The Nifty keeps drift softer for the seventh consecutive week. It has breached the previous swing low of 23,100 on the downside, suggesting a resumption of the downtrend. That stated, the RSI reveals a clear divergence: the new low in prices was not accompanied by a new low in the momentum indicator, suggesting exhaustion of selling pressure.

The immediate hurdle is at 23,300-23,400, which coincides with the gap area formed on September 24. Crucial backing is placed at 22,920-22,900, corresponding to the hourly softer Bollinger Band.

On the derivatives front, maximum Put open interest is at the 23,000 strike, while maximum Call open interest is at the 24,000 strike, followed by the 23,500 strike. The Put-Call Ratio improved from 0.70 to 0.92, indicating slightly bullish positioning ahead of the September series expiry.

Considering the momentum setup and options positioning, we expect the Nifty to witness a recovery towards 23,300-23,400 to fill the gap area.

Key Resistance: 23,300, 23,400

Key Backing: 23,000, 22,900

Strategy: Buy Nifty September Futures around 23,190, with a stop-loss at 23,050 and a target of 23,450.

Mahesh M Ojha, Vice President Research & Business Development at Kantilal Chhaganlal Securities

The Nifty stays under short-term selling pressure and has maintained a corrective trend, with the broader weekly structure still indicating softness. The daily RSI at 34 reflects weak momentum and suggests that the index is approaching an oversold zone, leaving room for a technical rebound. That stated, confirmation of a meaningful recovery would require sustained buying interest.

On the upside, 23,350 stays the immediate hurdle, followed by the 23,500-23,600 resistance zone. A decisive breakout and sustained trade above this range would improve the near-term technical setup and could signal a broader recovery.

On the downside, 23,050-22,960 stays the immediate backing band, while 22,800 is the next important backing level. A decisive breakdown below 23,000, particularly on elevated volumes, would reinforce the prevailing bearish structure.

Key Resistance: 23,350, 23,500, 23,620

Key Backing: 23,050, 22,960, 22,800

Strategy: Consider buying Nifty Futures on dips in the 23,150-23,190 range, with a stop-loss below 22,950 and upside targets of 23,300-23,480.

Bank Nifty – Outlook and Positioning

Osho Krishan, Chief Manager – Technical & Derivative Research at Angel One

Bank Nifty had yet another disappointing week of trade, registering a weekly loss of 1.38 percent. The index has now declined 4.21 percent since the beginning of September, putting it on course to register its weakest monthly performance since March this year.

The technical setup for the rate-sensitive index is deteriorating, warranting caution going forward. Prior backing zones are now turning into resistance, in line with the principle of polarity, pointing towards a gradual shift in resistance bands to softer marks. At the same time, the inability to reclaim or sustain above the 20-day DEMA clearly points towards a change in the short-term trend.

On the weekly charts, prices have additionally closed below the 55,800-55,700 band, which had earlier acted as a firm demand zone. The Point & Figure charts further reinforce the developing bearish setup, with the formation of a Bullish Pattern Reversal near the 10-column moving average.

Going forward, unless the overhead bearish gap in the 56,100-56,200 band is convincingly closed, a sell-on-climb strategy is likely to stay more appropriate. In terms of marks, the 55,350-55,250 band stays an immediate backing zone, followed by stronger backing at 54,800. On the upside, the 55,900-55,950 band is an immediate resistance zone, followed by the stronger 56,100-56,200 bearish gap zone.

Key Resistance: 56,500, 56,700

Key Backing: 55,250, 54,800

Strategy: Sell Bank Nifty Futures on a climb around 56,000, with a stop-loss at 56,500 and book earnings near the 55,000 mark.

Jatin Gedia, Technical Research Market observer, VP, Derivatives & Technical Research at Teji Mandi

Bank Nifty decisively broke below the 56,000 level, suggesting the resumption of the next leg of the slide. The decline in Bank Nifty was fuelled by declines in stocks such as Axis Bank and IndusInd Bank, which have been affected by the consultation paper issued by the IRDAI.

After the knee-jerk reaction, these stocks witnessed some recovery; that stated, the trend stays negative. On the RSI momentum indicator, a positive divergence can be observed, indicating exhaustion of selling pressure. This suggests that the slide in Bank Nifty could be in its final stages.

A breach below 55,300 could lead to a slide towards 54,750-54,500, while a recovery surge could take Bank Nifty towards 56,000-56,400.

Key Resistance: 56,400, 56,600

Key Backing: 55,300, 55,000

Strategy: Buy Bank Nifty September Futures around 55,687, with a stop-loss at 55,400 and a target of 56,600.

Mahesh M Ojha, Vice President Research & Business Development at Kantilal Chhaganlal Securities

Bank Nifty staged a minor intraday recovery after testing the softer bounds on Friday. On a daily basis, the index recorded a high of 55,762 and a low of 55,373, indicating prominent buying interest emerging at softer marks. That stated, the daily RSI stands at 38, confirming weak and bearish momentum as the index approaches the traditional oversold threshold.

While a technical rebound could be on the cards from these marks, traders at large must keep a close watch on upcoming high-impact triggers, particularly the HDFC Bank CEO announcement, which could dictate the next directional move.

Key Resistance: 55,770, 55,969, 56,160

Key Backing: 55,380, 55,130, 54,980

Strategy: Buy Bank Nifty Futures in the 55,500-55,580 range, with a stop-loss below 55,100 and targets of 55,750, 55,950 and 56,200.