Nifty 50 Outlook: A Potential Rebound to 25,650 and Bank Nifty's Support Above the 10-Day EMA

Nifty 50 and Bank Nifty Outlook

Market Analysis

The Nifty 50 index has been facing a consistent bearish bias in momentum indicators, indicating a potential consolidation phase. The index is expected to trade below the 25,650-25,700 resistance zone, with immediate support at 25,400-25,300. A decisive trade above 25,700 could raise the possibility of a move toward 25,900-26,000.

The Bank Nifty, on the other hand, has been losing bullish momentum. If the banking index convincingly breaks the 60,900-60,800 zone (10-day EMA and the previous day's low), 60,600-60,500 are the levels to watch. However, on the higher side, 61,300-61,500 is the hurdle zone.

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Recent Price Action

On February 25, the Nifty 50 climbed 58 points (0.23 percent) to 25,483, while the Bank Nifty fell 4 points to 61,043. Market breadth was slightly positive, with 1,503 shares seeing buying interest and 1,424 shares under pressure on the NSE.

Technical Analysis

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, notes that the Nifty 50 has been oscillating within the 25,885-25,327 band, resulting in both short- and long-term moving averages turning flat. Momentum indicators and oscillators also mirror this indecision.

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Key Resistance:

• 25,750
• 25,800

Key Support:

• 25,250
• 25,200
• 24,900

Strategy:

• Buy Nifty Futures above 25,700, with a stop-loss of 25,550, targeting 26,000.

Nilesh Jain, VP- Head of Technical and Derivative Research at Centrum Finverse, notes that the Nifty index has been undergoing consolidation, accompanied by selling pressure at higher levels. Immediate support is placed near the 200-DMA at 25,340, followed by the next support at 25,100. On the upside, the 100-DMA at 25,750 is acting as a strong resistance.

Key Resistance:

• 25,650
• 25,800

Key Support:

• 25,330
• 25,250

Strategy:

• Buy a Nifty 25,500 Put option above Rs 150, with an upside target of Rs 250 and a stop-loss placed at Rs 105.

Rupak De, Senior Technical Analyst at LKP Securities, notes that the Nifty remained volatile during the day, staying in line with the sentiment of the past few sessions. Overall, investors largely remained on the sidelines, as the index has spent the last two days trading broadly within the range of its 200-DMA (25,341) and 21-EMA (25,610).

Key Resistance:

• 25,650
• 25,750

Key Support:

• 25,300

Strategy:

• Buy Nifty 25,400PE of the March 2 expiry above Rs 100, with a stop-loss of Rs 78, targeting Rs 150.

Bank Nifty Outlook

The Bank Nifty has been outperforming the frontline indices for the last couple of weeks, but has been oscillating in a narrow range of the 61,678-60,560 zone. The index is trading near its all-time high level, with all moving average-based setups suggesting a bullish trend. However, the momentum indicators are portraying a sideways picture for now.

Key Resistance:

• 61,700-61,800

Key Support:

• 60,600-60,500