The Nifty 50 ended in the red for the second consecutive session on February 6, as investors turned cautious ahead of the Reserve Bank of India’s (RBI) interest rate decision on February 7. The index declined by 93 points and finished at 23,603, while the Bank Nifty advanced by 39 points to finish at 50,382.
Marketers forecast a further drop of the Nifty 50, with critical levels of 23,500 and 23,400 expected to be tested and possibly broken. On the positive side, 23 800 is still a robust resistance, and a move above it could push the index up to 24 000. Meanwhile, Bank Nifty must defend the 50,000 level to sustain its upward momentum, with potential resistance at 50,650 and 51,000. If the index goes below 50,000, the 49,700–49,500 level is likely to provide support.
The overall market breadth remained negative, with 1,404 shares declining against 1,164 shares advancing on the NSE.
Nifty 50: Technical Outlook and Trading Strategy
Chandan Taparia, Motilal Oswal Financial Services
As per Taparia the Nifty 50 resisted at higher levels even after recovering from previous lows. The index started with a gap-down on Monday but recovered remarkably on Tuesday, up more than 350 points. But post purchase acquisition has been poor, so holding the index within a seasonally tight range between 250 points up and down.
- Key Resistance: 23,800, 24,000
- Key Support: 23,333, 23,500
- Strategy: Buy Nifty Futures on dips with support at 23,500, targeting 23,800–24,000.
Virat Jagad, Technical Research Analyst, Bonanza
Jagad noted that the Nifty 50 faced resistance from a downward-sloping trendline and *50-day EMA (Exponential Moving Average), indicating market weakness. The Relative Strength Index (RSI) also faltered at the 60 level, fueling bearish trading.
- Key Resistance: 23,800, 24,000
- Key Support: 23,500, 23,200
- Strategy: Sell Nifty Futures near 23,700, with a stop-loss of 23,825, targeting 23,500.
Bank Nifty: Technical Outlook and Trading Strategy
Chandan Taparia, Motilal Oswal Financial Services
The Bank Nifty opened the session on an uptick but moved within a tight 350-point window, between 50,150 and 50,500. The production of a small-bodied candle with a long lower shadow suggests that buying activity is starting to build at lower levels. The index is in the general neighborhood of the 200-day EMA and to date outperformed the CMA.
- Key Resistance: 50,500, 51,000
- Key Support: 49,750, 50,000
- Strategy: Buy Bank Nifty Futures on dips with support at 49,750, targeting 50,500–51,000.
Virat Jagad, Bonanza
Jagad highlighted that Bank Nifty has resumed its upward momentum, confirming a bullish breakout from a double bottom pattern. The index is above the fast and slow EMAs, confirming a bullish trend. The RSI is also rising, which reflects the strong momentum in the banking industry.
- Key Resistance: 51,000, 51,400
- Key Support: 49,800, 49,500
- Strategy: Buy Bank Nifty Futures around 50,200 with a stop-loss of 49,800, targeting 51,000.
Market Sentiment and Key Takeaways
- Nifty 50 remains cautious ahead of RBI’s interest rate decision, with resistance at 23,800 and key support at 23,500.
- Bank Nifty continues to show strength, defending the 50,000 level, with a potential upside toward 51,000.
- Market breadth remains weak, with more stocks declining than advancing.
- Traders should watch key levels for Nifty and Bank Nifty to determine market direction in the coming sessions.
Meanwhile, during the time leading up to the RBI’ decision, the market participants should be prepared for possible fluctuations, and Nifty 50 and Bank Nifty are currently at the key support and resistance levels respectively.
Disclaimer:
The information provided in this article is for informational and educational purposes only and should not be considered financial advice. Stock market investments are subject to market risks. Readers are advised to conduct their own research or consult a financial expert before making any investment decisions. The author and publisher are not responsible for any financial losses incurred based on this information.
“Stay updated with the latest news and insights – follow us at YPBB News on X for real-time updates and exclusive stories!”
