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The Indian stock market experienced a significant rally on August 16th, with the benchmark indices, Nifty 50 and Bank Nifty, surpassing the 50 percent Fibonacci retracement level, marking a potential turning point in the market's direction. This surge has ignited optimism for continued upward momentum, with analysts predicting that the Nifty 50 could reach the 24,700-24,800 range and potentially even touch the 25,000 mark. However, maintaining these levels will be crucial for sustained growth. On the downside, the 24,400-24,300 range is expected to act as a support zone, providing a cushion against downward pressure.
For the Bank Nifty, breaking above the 50,800 level, coinciding with the 20- and 50-day Exponential Moving Averages (EMAs), is seen as a catalyst for a further rally towards 51,000. Support for the Bank Nifty is projected at the 50,000 level. The recent market movement has been accompanied by strong buying activity, evident in the Nifty 50's gain of 397 points (1.65 percent) and the Bank Nifty's jump of 790 points (1.6 percent) on August 16th. This positive sentiment is further supported by the fact that on the National Stock Exchange (NSE), 1,624 shares advanced, while only 737 declined.
Multiple experts, including Rajesh Palviya from Axis Securities, Rajesh Bhosale from Angel One, and Vinay Rajani from HDFC Securities, have provided detailed technical analysis of both indices. Palviya highlights the bullish weekly candle formation on the Nifty 50 chart, with support around the 50-day Simple Moving Average (SMA). He predicts potential upward movement to 24,850-25,000 levels if the index sustains above 24,700, while a break below 24,450 could trigger selling, pushing the index towards 24,200-24,000. Similarly, for the Bank Nifty, he identifies a “Doji” candlestick pattern, suggesting indecisiveness in the market. He expects buying pressure above 50,750, leading to a rally towards 50,850-51,000, while a breach below 50,200 could result in selling, dragging the index to 50,000-49,800.
Bhosale points to a positive outlook for the Nifty 50, with potential for testing levels of 24,700 and 24,850 in the upcoming sessions. However, he also highlights the importance of the 24,200 level, emphasizing that a breach below this mark could lead to a return to lower levels of 24,000 and 23,900. For the Bank Nifty, he emphasizes that the index remains within its recent trading range, and a breakout above the 50,700-50,800 zone would signify buyer dominance. He advises a buy-on-dips strategy, contingent on maintaining the weekly low around 49,700. Rajani provides a bullish outlook for both indices, citing the Bank Nifty's double-bottom formation near 49,650 and the Nifty 50's positive short-term indicators.
In addition to their individual analyses, the experts provide specific trading strategies for both Nifty 50 and Bank Nifty. These strategies typically involve specifying entry points, stop-loss levels, and target prices, allowing traders to navigate the market with calculated risk management. While the experts emphasize their bullish outlooks, they also acknowledge potential risks and volatility, advising investors to conduct thorough research and consult with certified financial advisors before making any investment decisions.
Source: Trading Plan: Will Nifty 50 extend upward journey towards 24,700, Bank Nifty climb above 50,800?