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The Indian stock market, specifically the Nifty 50 and Bank Nifty indices, exhibited a period of range-bound trading, prompting analysis and diverse trading strategies from financial experts. The article focuses on the indecisive market behavior, characterized by small candlestick patterns and a lack of decisive breakthroughs in either direction. Several analysts weighed in, providing their perspectives and recommended trading strategies based on technical indicators like support and resistance levels, moving averages (e.g., 200-DEMA, 50 EMA, 150 DEMA), Fibonacci retracements, and candlestick patterns (e.g., Marubozu, Doji, inside bar). This range-bound trading is attributed to various factors, including the cautious sentiment of Foreign Portfolio Investors (FPIs) and the overall market indecision reflected in the relatively small price fluctuations. The lack of strong buying or selling momentum highlighted the delicate balance in the market, and the need for a definitive price break to signal a clear directional trend.
Dhupesh Dhameja of Samco Securities noted the tepid performance of Nifty, highlighting the small candlestick bodies as indicators of market indecisiveness. He pointed out the FPI selling pressure as a key factor contributing to the volatility. Dhameja emphasized the significant resistance zone around 23,800–24,000 for Nifty and the support zone around 23,500–23,600. For the Bank Nifty, he observed waning bullish momentum and the importance of the 51,000 psychological support level. His strategies for both indices were primarily bearish-leaning, recommending short positions unless the indices decisively break above their respective resistance levels.
Ashish Kyal of Waves Strategy Advisors presented a different perspective, highlighting the 13 consecutive days where Nifty failed to close above the previous day's high. He emphasized the bearish three-candlestick rule and the multiple failed attempts to break above 23,870. Kyal advocated for a bear strategy in options if 23,630 is breached. For Bank Nifty, his analysis focused on the consolidation near the lower end of the Bollinger Bands and the importance of a break below 51,000 to resume the selling trend. His strategies also leaned bearish, suggesting short positions upon the breach of key support levels.
Vidnyan S Sawant of GEPL Capital focused on the strong resistance Nifty faced at 23,860 and the rejection at the 50% retracement level. He highlighted the weakness in both weekly and daily chart structures, advising a bearish approach. For Bank Nifty, Sawant emphasized the critical support at 49,700, noting that a breach could signal a shift to negative sentiment. His trading recommendations included a sell strategy for Nifty and a buy strategy for Bank Nifty only if it breaks above 52,000.
Preeti K Chabra of Trade Delta provided a more nuanced analysis, utilizing Fibonacci levels and moving averages in her evaluation. For Nifty, she highlighted the narrow range formation and the crucial support at the 200 DEMA and the 23.6% Fibonacci level. She offered a conditional trading strategy, suggesting buying above 23,871 and selling below 23,692. For Bank Nifty, she also noted the narrow range formation and crucial support at the 150 DEMA. Her Bank Nifty strategy was also conditional, recommending buying above 51,417 and selling below 51,137. She further highlighted the bearish Marubozu candle on the weekly chart for both indices as an indicator of the recent sell-off.
Source: Trading Plan: Can Nifty, Bank Nifty break out of their rangebound trading pattern?