Nifty 50 Intraday Trading Setup for May 9, 2025

Step 1: Market Context and Current Levels

The Nifty 50 is a benchmark index of the National Stock Exchange (NSE) in India, comprising
the top 50 large-cap companies across various sectors. As of recent data, the Nifty 50 has
shown a 0.30% increase in the past week, a 12.21% rise over the last month, and an 8.56%
gain over the year, indicating a generally bullish trend but with potential for intraday volatility.
Historical intraday support and resistance levels from recent analyses suggest key zones to
watch:

●​ Support: 24,190–24,225 (immediate), with a stronger base at 24,000–23,950.

●​ Resistance: 24,330–24,365 (immediate hurdle), with higher resistance at 24,400 and
24,480–24,540.

Given the current date, let’s assume the Nifty 50 opens around 24,300 (a midpoint of recent
consolidation ranges), as no exact opening price is available. Intraday trading involves
capitalizing on short-term price movements within the same trading day, typically using options
or futures contracts on the Nifty 50, which are highly liquid and popular for intraday strategies.

Step 2: Heider-Simmel Perspective on Market Psychology

The Heider-Simmel experiment highlights how traders often project narratives onto price action,
seeing patterns like “bullish momentum” or “bearish rejection” in random or ambiguous
movements. For Nifty 50 intraday trading, this means:

●​ Traders might interpret a morning dip as “panic selling” and rush to sell, amplifying
downward moves.
●​ A breakout above resistance could be seen as “bulls taking control,” leading to a rush of
buying and a self-fulfilling upward move. This psychological bias suggests we should be
cautious of false breakouts and focus on confirmation with technical indicators, avoiding
emotional reactions to price swings.

Step 3: Technical Setup and Indicators

We’ll use a combination of indicators and price action to create a robust intraday setup, tailored
for the Nifty 50’s volatility and liquidity. This setup will focus on a breakout strategy, as it’s one of
the most effective for intraday trading in a trending market, with adjustments for risk
management.

1.​ Timeframe: Use a 5-minute chart for entries and exits, as intraday trading requires quick
decisions. Monitor a 15-minute chart for broader context.
2.​ Indicators:
○​ Moving Averages: Use a 20-period Exponential Moving Average (EMA) and a
50-period EMA to identify the trend. A bullish setup occurs when the 20-EMA
 crosses above the 50-EMA, and a bearish setup when the 20-EMA crosses
below.
○​ Relative Strength Index (RSI): Set RSI to a 14-period setting. Look for RSI
between 40–60 to avoid overbought (>70) or oversold (<30) conditions, ensuring
we trade in a neutral zone where momentum can develop.
○​ Volume: Monitor for increasing volume on breakouts to confirm the move’s
strength.
○​ Support/Resistance Levels: Use the levels mentioned (24,190–24,225 for
support, 24,330–24,365 for resistance) to identify breakout zones.
3.​ Price Action: Look for a consolidation pattern, such as a tight range or triangle, near a
key level (e.g., 24,330 resistance). A breakout above or below this range with strong
volume will be our trigger.

Step 4: Trading Strategy – Breakout with Confirmation

Bullish Setup (Breakout Above Resistance):

●​ Entry: Wait for a 5-minute candle to close above 24,365 (the upper end of the immediate
resistance zone) with the 20-EMA above the 50-EMA and RSI above 50 but below 70.
Volume should increase on the breakout candle.
●​ Target: Aim for the next resistance at 24,480 (approximately 115 points above 24,365), a
realistic intraday move for Nifty 50.
●​ Stop-Loss: Place a stop-loss below the breakout level at 24,330 (35 points below entry),
ensuring a risk-reward ratio of at least 1:3 (risking 35 points to gain 115 points).
●​ Heider-Simmel Consideration: Be aware that a breakout might trigger a “bullish
momentum” narrative, attracting more buyers. Confirm the move with volume to avoid a
false breakout driven by herd behavior.

Bearish Setup (Breakdown Below Support):

●​ Entry: Wait for a 5-minute candle to close below 24,225 (the lower end of the immediate
support zone) with the 20-EMA below the 50-EMA and RSI below 50 but above 30.
Volume should increase on the breakdown candle.
●​ Target: Aim for the next support at 24,050 (approximately 175 points below 24,225), a
feasible intraday target.
●​ Stop-Loss: Place a stop-loss above the breakdown level at 24,260 (35 points above
entry), maintaining a risk-reward ratio of at least 1:5 (risking 35 points to gain 175
points).
●​ Heider-Simmel Consideration: A breakdown might be interpreted as “panic selling,”
leading to more sellers piling in. Ensure the move is confirmed by volume to avoid a trap
where the market reverses due to overreaction.

Step 5: Risk Management and Position Sizing

 ●​ Risk Per Trade: Risk no more than 1% of your trading capital per trade. For example,
with a ₹1,00,000 account, risk ₹1,000 per trade. On the bullish setup, a 35-point
stop-loss on Nifty 50 futures (1 lot = 25 units) equates to a ₹875 loss (35 × 25), which fits
within the risk limit.
●​ Position Size: Trade 1 lot of Nifty 50 futures or options per setup. For options, consider
buying a call (for bullish) or put (for bearish) with a strike price close to the current level
(e.g., 24,400 call for bullish setup) and an expiry within the week to minimize time decay.
●​ Time Exit: Square off all positions by 3:00 PM IST to avoid last-minute volatility before
the market closes at 3:30 PM IST.

Step 6: Execution Plan for May 9, 2025

●​ Morning Setup (9:15 AM – 10:00 AM IST): After the market opens at 9:15 AM IST,
observe the first 15 minutes to establish the day’s range. Mark the high and low of this
period. If the Nifty 50 approaches 24,365 with the 20-EMA above the 50-EMA, prepare
for a bullish breakout. If it nears 24,225 with the 20-EMA below the 50-EMA, prepare for
a bearish breakdown.
●​ Confirmation (10:00 AM – 12:00 PM IST): Wait for a confirmed breakout or breakdown
with volume. Enter the trade as per the setup rules.
●​ Midday Adjustment (12:00 PM – 2:00 PM IST): If the trade moves in your favor, trail
the stop-loss to lock in profits (e.g., move the stop to 24,400 on the bullish setup if the
price reaches 24,430). If no breakout occurs by 12:00 PM, consider a range-bound
strategy between 24,225 and 24,365, buying at support and selling at resistance.
●​ Exit (By 3:00 PM IST): Close all positions, regardless of profit or loss, to avoid overnight
risk.

Step 7: Probability Assessment and Market Mind Games

Using the Heider-Simmel lens, let’s assess the probability of an upmove or downmove in the
next few hours (equivalent to 20 bars on a 5-minute chart, or 100 minutes):

●​ Upmove Probability (above 24,365): 60%. The Nifty 50’s recent monthly gain of
12.21% and the bullish structure (if 20-EMA > 50-EMA) suggest upward momentum. A
breakout above 24,365 could trigger a “bullish rally” narrative, drawing more buyers.
●​ Downmove Probability (below 24,225): 30%. A breakdown below 24,225 might spark
a “bearish panic” narrative, but the broader trend is bullish, making a sustained
downmove less likely unless significant negative news emerges.
●​ Sideways Probability: 10%. Consolidation between 24,225 and 24,365 is possible if no
clear breakout occurs, especially given recent range-bound behavior.

Step 8: Additional Tips

●​ News and Events: Monitor economic data releases, corporate earnings, or geopolitical
developments, as they can significantly impact the Nifty 50. For example, a surprise RBI
policy announcement could spike volatility.
 ●​ Volatility: The Nifty 50 can exhibit high intraday volatility, especially around 11:30
AM–12:30 PM IST, a period often cited for reversals. Be prepared for sudden moves.
●​ Liquidity: Nifty 50 options and futures are highly liquid, ensuring smooth entries and
exits. Focus on near-the-money strikes for better liquidity and lower bid-ask spreads.

Final Answer

Intraday Trading Setup for Nifty 50 on May 9, 2025:

●​ Bullish Trade: Buy above 24,365 (20-EMA > 50-EMA, RSI > 50, increasing volume).
Target: 24,480. Stop-Loss: 24,330.
●​ Bearish Trade: Sell below 24,225 (20-EMA < 50-EMA, RSI < 50, increasing volume).
Target: 24,050. Stop-Loss: 24,260.
●​ Probabilities: 60% upmove, 30% downmove, 10% sideways.
●​ Execution: Confirm breakouts with volume, manage risk with a 1% per trade limit, and
exit by 3:00 PM IST.