Trading Plan: Will Nifty continue to perform better than Bank Nifty?

Market Trend

The Nifty 50 outperformed Bank Nifty, recording a new all-time high on July 9. The index formed a green candle on the daily charts, with a higher high-higher low formation. Hence, if the index sustains above 24,300, a further rally beyond 24,500 looks likely in the coming sessions. Until then, consolidation may continue with support at 24,200. Rangebound trading is expected to continue in Bank Nifty, with a hurdle at 53,000 on the higher side and 52,200 as support, experts said.

On Tuesday, the Nifty 50 ended at a new closing high of 24,433, up 113 points or 0.46 percent, while the Bank Nifty gained 143 points to close at 52,569. About 1,176 shares advanced, and 1,168 shares declined on the NSE.

Nifty Outlook and Strategy

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

Nifty has continued to touch lifetime high levels and is approaching near 24,500 levels. However, prices are now also near the upper channel resistance from where we have seen past three peaks. The upside room is now getting limited. So, we may be in the matured stage of an up move as per Neo wave logic. However, unless the support is broken, it is better to use dips as buying opportunities for a short-term move to 24,500 levels.

Key Resistance: 24,500

Key Support: 24,240

Strategy: Long positions can be created on dips to 24,380 with 24,300 as a stop-loss and a target of 24,500.

Apurva Sheth, Head of Market Perspectives & Research at Samco Securities

Nifty has gained more than 1,000 points in over a month. The index continues to remain in a tight bull grip. However, some slowdown in momentum is visible. The index is forming a bearish divergence on the 75-minute chart, indicating that successive gains after crossing the 24,000 mark have come with significant effort. The bulls will remain in control as long as the index holds above 24,250 levels. A move above 24,500 could trigger a parabolic rise to 25,000 levels, but we prefer to trade cautiously and wait for a dip.

Key Resistance: 24,500, 25,000

Key Support: 24,250, 24,000, 23,500

Strategy: Traders must employ a wait-and-watch approach and wait for dips to go long.

Riyank Arora, Technical Analyst at Mehta Equities

The Nifty is maintaining a positive trend. The overhead trendline resistance is gradually rising as the index forms higher lows over time. The immediate support is now at 24,300.

Key Resistance: 24,500, 24,600

Key Support: 24,300 and 24,150

Strategy: Buy Nifty on declines around 24,350 with a strict stop-loss at 24,200, aiming for potential targets of 24,500 and 24,600.

Bank Nifty - Outlook and Positioning

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

For the past three days, Bank Nifty has failed to show any directional move and formed neutral candles consecutively, suggesting indecision. For now, we can expect rangebound movement between 53,300 and 51,900 in the short term.

Key Resistance: 53,300

Key Support: 51,900

Strategy: Long positions can be created above 52,750 with 52,290 as a stop-loss and a target of 53,300.

Apurva Sheth, Head of Market Perspectives & Research at Samco Securities

Bank Nifty has been holding above the exit poll day high of 51,133 over the last couple of weeks. It’s trying to build a base around 52,000 levels. The index has held on steadily despite a correction in the heavyweight HDFC Bank, showing that other stocks in the index have displayed strength. The 75-minute RSI (Relative Strength Index) is trading around the centerline of 50, which is positive. We believe that further advances from here on in the markets could be led by Bank Nifty.

Key Resistance: 53,000, 53,357

Key Support: 52,000, 51,500, 51,133

Strategy: Traders can buy Bank Nifty July Futures at current levels of 52,580, with a target of 53,300, and place a stop-loss at 52,000.

Riyank Arora, Technical Analyst at Mehta Equities

The Bank Nifty is trading comfortably above its major support at 52,000 and is showing strong consolidation. Immediate resistance is at 52,800. Overhead resistance is near 53,300 and 54,000, which should serve as potential targets as long as it stays well above the consolidation level.

Key Resistance: 53,300, 54,000

Key Support: 52,000

Strategy: Buy Bank Nifty at CMP around 52,500 with a strict stop-loss at 52,000, aiming for potential targets of 53,300 and 54,000.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.