Trade Setup For Aug 22: Nifty Faces Immediate Resistance Near 25,250

The NSE Nifty 50, which closed in the green for the sixth straight session on Thursday, is likely to face immediate overhead resistance near the 25,250 zone, according to Bajaj Broking Research.

Although the larger market trend is upward, the charts show that the index formed a small bearish candle with a higher high and higher low, signalling consolidation amid stock-specific action on the weekly expiry session, it said.

"A decisive breakout above this supply zone could open the gates for an extended leg higher towards 25,500–25,600 levels in the coming weeks. Conversely, inability to surpass this hurdle may lead to a time-wise consolidation within the 25,250–24,600 band," the research firm said.

The brokerage has revised higher support levels towards the 24,600–24,500 zone.

"We are of the view  that the larger market trend is upward, but for day traders, buying on intraday corrections and selling on rallies would be the ideal strategy," said Shrikant Chouhan, head equity research at Kotak Securities.

"Sentiment remains positive, with the index comfortably holding above the short-term moving average," Rupak De, senior technical analyst at LKP Securities, said.

The outlook for Bank Nifty remains apprehensive as it "formed a bearish candle with a higher high and higher low signaling consolidation amid stock specific action", according to Bajaj Broking.

"We expect the index to extend consolidation in the range of 54,800-56,300. Only a movement beyond this range will signal the next directional move," the brokerage added. Key support lies between 54,800 and 55,000, while on the upside resistance is seen around 56,000–56,300 range.

The benchmark equity indices closed in the green for the sixth straight session on Thursday, recording the longest winning streak since April.

The NSE Nifty 50 ended 33.2 points or 0.13% higher at 25,083.75 and the BSE Sensex closed 142.87 points or 0.17% up at 82,000.71.

The Nifty breached the resistance level of 25,100 but could not sustain. It was also the expiry day for Nifty weekly contracts.

The Indian rupee closed 25 paise weaker at 87.26 a dollar.