Are Nifty and Bank Nifty Ready to Break Out After Four Days of Consolidation?
The stock market has seen the Nifty 50 and Bank Nifty consolidating in a tight range for four consecutive sessions, leaving traders and investors speculating about the next big move. With technical indicators showing positive signals, experts believe an upward breakout may be on the horizon.
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Nifty 50 Analysis
Closing on December 11, 2024:
The Nifty 50 closed at 24,642, gaining 32 points. Market breadth was positive, with 1,344 shares advancing against 1,160 declining on the NSE.
Key Levels to Watch:
Resistance: 24,750, 24,800
Support: 24,500, 24,510
Expert Insights:
Jatin Gedia, Technical Analyst at Mirae Asset Sharekhan, highlights that the Nifty is rangebound between 24,500 and 24,800.
A decisive move above 24,750 could resume the uptrend, targeting 24,858. However, a fall below 24,500 might trigger selling pressure.
Strategy:
Buy Nifty Futures above 24,750 with a stop-loss at 24,500, targeting 24,858.
Technical Indicators:
The Put-Call Ratio (PCR) stands at 0.71, indicating a slight bearish sentiment. However, strong support at 24,500 (based on open interest in Put options) suggests a base for recovery.
Momentum Indicators:
The RSI (Relative Strength Index) remains above 55, signaling a gradual build-up of positive momentum.
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Bank Nifty Analysis
Closing on December 11, 2024:
The Bank Nifty ended at 53,391, down by 186 points, reflecting muted sentiment.
Key Levels to Watch:
Resistance: 53,800, 54,000
Support: 53,300, 53,000
Expert Insights:
Bank Nifty needs to hold above the 53,300-53,200 support zone to target 54,000 or higher. A fall below this level may bring the index closer to 53,000, with a possibility of breaking lower.
Strategy:
Buy Bank Nifty Futures on dips near 53,300 with a stop-loss below 53,000, targeting 53,800 and 54,000.
Momentum Indicators:
The index is trading above its 20-day EMA, maintaining a bullish undertone. However, 53,800-54,460 will act as a major resistance zone.
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Market Sentiment and Outlook
The overall market sentiment remains cautiously optimistic. While consolidation reflects short-term indecisiveness, the technical charts show signs of bullish momentum. Traders are advised to monitor key resistance and support levels closely for any breakout or breakdown signals.
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Pro Tips for Traders
1. Nifty 50: A breakout above 24,750 could push the index towards 25,300 in the medium term. Use 24,500 as a strict stop-loss for long positions.
2. Bank Nifty: Buy on dips as long as the index sustains above 53,300. Target 54,460 for an upside move.
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Key Takeaways for December 2024
Technical indicators like RSI, EMA, and PCR suggest bullish momentum in both indices.
Watch out for key resistance zones (24,750 for Nifty and 54,000 for Bank Nifty) for confirmation of a breakout.
Maintain strict stop-loss levels to manage risks effectively.
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