Traders can adopt buy on dips strategy on Nifty, Bank Nifty: Ravi Nathani

The technical analyst expects an upside target of 17,800 - 17,900 on the Nifty, with stop loss of 17,400.

Nifty 50 Index

Bias: Buy on Dips

Last close: 17,594.35

During the previous trend session, there was an evident and rapid recovery, pointing towards a pullback rally. A current close above 17,590, indicates that the index is expected to be bullish in the very short term, and there will likely be resistance in the range of 17,800 - 17,900.

As a result, traders are advised to purchase on dips while keeping a stop loss of 17,400 for a target of 17,800 - 17,900. The pivot levels for the month are also centered around 17,875.

If there is a substantial breakout above 17,900, the trend is expected to shift in the short term, and the subsequent resistance beyond 17,900 will likely be observed at 18,264 and 18,536.

The Relative Strength Index (RSI) is ascending, and the Moving Average Convergence Divergence (MACD) on daily charts is demonstrating indications of reversal. Should both of these indicators become positive, there may be a sharp turnaround on the charts, and the next anticipated resistance will be in the range of 18,264 - 18,536.

The most effective trading strategy for short-term traders is to buy on dips while maintaining a tight stop loss of a close below 17,400 and anticipating a target between 17,800 - 17,900. Once the index concludes a close above 17,900, swing traders can purchase the index with a target of 18,264 - 18,536 while maintaining a stop loss of 17,800 on a closing basis.

In conclusion, the NIFTY 50 INDEX is predicted to be bullish in the absolute near term, with resistance likely in the range of 17,800 - 17,900. Therefore, traders should purchase on dips while maintaining a strict stop loss of a close below 17,400.

Bank Nifty Index

Bias: Buy on Dips

Last close: 41,251.35

The BANK NIFTY INDEX has been exhibiting a trend of lower tops and lower bottoms over the past three months. However, the current swing low has not surpassed the previous swing low, resulting in the capture of a higher low for the near term. This may indicate the start of a new up trend, but this can only be confirmed if the Index trades above 41,980.

Until then, it is expected to trade within a range of 41,950 - 39,450. A violation of this range, either higher or lower, would trigger a fresh breakout on charts. If the upper band is breached, the next resistance on charts would be seen at 42,575 - 43,000.

On the other hand, if the lower range is broken, support could be expected around 39,175. Overall, it seems that the trend for the BANK NIFTY INDEX is bullish on charts, and a violation of the above-mentioned range would trigger a new trend.

Traders are advised to buy on dips and exercise caution while trading around the range boundaries.

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