Nifty 50 and Bank Nifty Face Key Support Levels Amid Ongoing Consolidation

Nifty Falls Below 50-day EMA, Raises Concerns of Further Weakness

The Nifty 50 index continued its downward trend, falling 118 points (0.49 percent) to 23,914 on May 26, while the Bank Nifty slipped 201 points (0.36 percent) to 55,093. Market breadth turned negative as about 1,571 shares saw selling pressure compared to 1,402 shares that gained on the National Stock Exchange.

The Nifty 50 failed to defend the 50-day EMA (24,000), a crucial hurdle for further sharp upmove toward long term moving averages (100-day EMA – near 24,370 and 200-day EMA – 24,600). Until it climbs back and sustains above it, the consolidation may continue with immediate support of 23,800 as below it, bears may drag the index toward 23,700-23,600 levels.

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Nifty Outlook and Strategy

Experts suggest that the Nifty 50 continued to slide after facing resistance around 24,090. This fall completely engulfed the body of yesterday’s candlestick and formed an outside bar. The fall seems to be corrective in nature so far and can be viewed as a retracement to the previous upmove from 23,400.

The market breadth remained strong on multiple parameters and gives confidence to buyers, although the trending moves will remain stock-specific to mid-sized companies. The very short-term moving averages are trending upwards and suggest a short-term uptrend.

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However, the medium-term and long-term exponential moving averages are still trending downwards and will continue to provide resistance at 24,380 and 24,640. The upmove seems to largely remain slow and constructive, which would test the patience of bulls to hold onto their long positions in the index.

Aditya Thukral's Nifty Strategy

Buy Nifty Futures on dips around 23,925 with a stop-loss of 23,825, targeting 24,125.

Ashish Kyal's Nifty Strategy

Long positions can be created if Nifty breaks above 24,120 with stop-loss as 24,000 and target of 24,220 followed by 24,300 levels.

Preeti K Chabra's Nifty Strategy

Consider buying Nifty Futures near 23,867 for a target of 24,089, followed by 24,181 with a stop-loss of 23,771.

Bank Nifty - Outlook and Positioning

The banking index experienced a corrective trading session; however, this correction seems incomplete, and it could extend to another trading session at least. Also, during this process, the index should not close below the previous day’s low, which would be crucial to maintain a bullish stance.

Aditya Thukral's Bank Nifty Strategy

Buy Bank Nifty Futures on dips around 55,100 with a stop-loss of 54,800, targeting 55,600.

Ashish Kyal's Bank Nifty Strategy

Long positions in Bank Nifty Futures can be created above 55,500 with stop-loss as 55,250 and target of 55,750 followed by 55,900 levels.

Preeti K Chabra's Bank Nifty Strategy

Consider buying Bank Nifty Futures near the cash reference level of 54,996 for a target of 55,536 followed by 55,850 while maintaining a strict stop-loss of 54,831.