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The Indian stock market, specifically the Nifty 50 and Bank Nifty indices, experienced a period of relative stability on Budget Day (February 1st), closing near key support levels. While the session ended with a slightly negative bias, the indices managed to defend crucial thresholds, indicating a potential for continued volatility. The 300-point trading range observed on Budget Day (23,300-23,630 for Nifty and a comparable range for Bank Nifty) is identified by multiple analysts as a critical area to monitor in the coming trading sessions. A close above 23,630 for Nifty (coinciding with the 200-day EMA) is seen as a bullish signal, potentially leading to further gains towards 23,800-23,900. Conversely, a break below 23,300 for Nifty could trigger a downward movement towards 23,100. Similarly, Bank Nifty requires a closing price above 49,700 to initiate a rally towards 50,000 and 50,500, while 49,000 serves as a key support level.
Several prominent analysts provide their perspectives and trading strategies. Osho Krishan of Angel One highlights Nifty's respite at the lower end of a 'Falling Wedge' pattern, noting minimal FII participation on Budget Day. He suggests caution due to the looming threat of potential tariffs imposed by Donald Trump. Krishan views 23,400-23,350 as immediate support for Nifty, with 23,100-22,800 as key support levels. Resistance levels are identified around 23,670-23,700 (50-day EMA) and 23,800-24,000 (upper band of the 'Falling Wedge'). His options analysis suggests an intermediate trading range, with significant open interest at 23,200-23,000 (Put) and 23,500-24,000 (Call) strikes. Krishan's recommended strategy involves buying Nifty Futures on dips around 23,300 with a stop-loss at 23,000, targeting profits near 23,800. For Bank Nifty, he notes a Doji formation near resistance and suggests caution, advising against aggressive long trades unless a convincing breakout above 49,650-49,700 occurs. He identifies support at 49,000 and 48,450-48,200, suggesting a buying opportunity around 49,000 with a stop-loss at 48,600, aiming for 49,700.
Rajesh Palviya of Axis Securities points out that Nifty formed a Bullish Engulfing pattern on the weekly chart, a key reversal signal. He notes that a break above last week's high would confirm this pattern and potentially signal a trend reversal. Palviya suggests that a sustained move above 23,650 could push Nifty towards 23,850-24,000, while a break below 23,250 might lead to selling pressure towards 23,000-22,750. His strategy involves buying Nifty Futures around 23,300 with a stop-loss of 23,150, targeting 23,600-23,700. For Bank Nifty, Palviya also observes a Bullish Engulfing pattern on the weekly chart, suggesting a strong reversal signal. He highlights the resistance near 49,700, and a sustained move above 50,000 could drive Bank Nifty towards 50,500-51,000, while a break below 49,000 could lead to selling pressure towards 48,500-48,000. His Bank Nifty strategy is to buy Futures near 49,100 with a stop-loss of 48,800, targeting 49,800 and 50,000. Both analysts' outlooks incorporate technical indicators such as RSI, highlighting a potential shift in momentum to the upside.
Ashish Kyal of Waves Strategy Advisors uses the 55-Day Time Cycle method to analyze Nifty, suggesting that the short-term low is in place. He identifies immediate resistance at 23,800 and support at 23,120. Kyal expects consolidation between 23,630 and 23,300 before a potential resumption of the positive trend. A break below 23,300 might lead to a retest of 23,120 before another upward move. His overall strategy for Nifty has shifted from 'sell on rise' to 'buy on dips', with upside targets of 23,800. For Bank Nifty, Kyal observes that prices have formed a double-bottom pattern and are trading at the neckline. A close above 49,700 could confirm a breakout, leading to fresh buying. He points to 48,900 as the nearest support level. Kyal's strategy recommends taking long positions above 49,700, targeting 50,000 and 50,200, with a stop-loss of 49,400. All three analysts agree on the importance of monitoring key support and resistance levels and offer slightly different but consistent trading strategies based on their interpretation of technical indicators and market trends. The range bound nature of the market is clear in their predictions.
Source: Trading Plan: Will Nifty manage to defend 23,400, Bank Nifty sustain above 49,500?