Charts indicate bearish trend for Nifty Metal over near-term: Ravi Nathani

According to the technical analyst, charts suggest bullish trend for Nifty FMCG index, while bearish for Nifty Metal index

Nifty FMCG
Last close: 44,940.45 (Bullish)

As the index undergoes a sharp correction in the near term, it implies that it has fallen significantly from its previous highs. This decline, therefore, amounts to more than 1,700 points or approximately 4 per cent, indicating negative market sentiment.

On technical charts, the index is expected to find strong support at the level of 44,636, which suggests that there is a high likelihood of investors buying stocks at this level, due to its perceived value.

However, if the index falls below this level, it could result in a bearish phase, which means that the bulls' prospects will diminish.

Risk-taking traders may view this situation as an opportunity to purchase stocks at this level with a strict stop loss. This would limit their potential losses and allow them to take advantage of any potential technical pullback.

Resistance levels are expected to be encountered at 45,325 - 45,725 on the charts. Therefore, investors are likely to face difficulties in the index rising above these levels due to prevailing market sentiment.

If the index falls below the 44,636 level, it would be deemed a negative breakdown on the charts, possibly leading to a prolonged bearish phase.

Furthermore, the next support level is predicted to be around 44,150, which would also be an oversold zone in the near term, meaning that investors may start purchasing stocks at this level, possibly leading to a potential rebound in the index.

Nifty Metal
Last close: 5,269.10 (Bearish)

As the index trades at 5,269.10, charts suggest a bearish trend in both the near and short term. All technical indicators, including RSI, EMA, and PSR, suggest a downtrend in the index.

Additionally, price action data indicates that the index may receive support at around 4,964 for the near term. On a medium term, the overall trend of the index is downward, and therefore, the best trading strategy for traders would be to sell on any upward movement. This means that traders should sell the index when the price rises to take advantage of potential profits.

On the other hand, investors are advised to wait patiently for the index to complete its current corrections. The charts indicate that the support level for this index, where investors can buy stocks, is expected to be around 4,200 and 3,600.

In summary, the Nifty Metal index is currently in a bearish trend, with all technical indicators suggesting a downtrend. Traders should sell on any upward movement, while investors should wait patiently for the completion of current corrections.

(Ravi Nathani is an independent technical analyst. Views expressed are personal).