Charts hint near-term correction for Nifty FMCG, sell-on-rise approach apt

It is recommended that traders adopt a cautious approach while trading in Nifty FMCG index, given the overextended market conditions and the likelihood of a correction in the near term, said analyst

Nifty FMCG
Last close: 48,369.10
 

Upon analysis of daily charts, the index appears overextended, having achieved all its targets, and hence, indicating a correction in the near term.

Given these observations, traders are advised to adopt a sell-on-rise approach or book profits at the current market price with a strict stop-loss limit of 48,675 on a closing basis. It is anticipated that the index will underperform for some time, and therefore, investors must exercise caution in their trading strategies.

On the charts, the first support level is expected around 48,000-47,800, underscoring the potential for further downside in the near term.

Investors are advised to maintain a strict stop-loss limit and closely monitor the index's performance to minimise potential losses.

In conclusion, it is recommended that traders adopt a cautious approach while trading in the Nifty FMCG Index, given the overextended market conditions and the likelihood of a correction in the near term.

By implementing a sell-on-rise strategy or booking profits at the current market price and maintaining a strict stop-loss limit, investors can mitigate potential losses and capitalise on any minor price fluctuations that may occur.

Nifty Auto
Last close: 13,648.50

Chart analysis reveals that the short-term trend is bullish, although the index is likely to encounter stiff resistance in the range of 13,740-13,800 in the near term.

It is anticipated that the index will make its near-term top within this range and subsequently start correcting. The first support on the charts is expected between 13,100-13,050, and once this range has been breached, the next support level would be between 12,675-12,625.

Investors are advised to accumulate this index for the near and short term once it reaches the support levels. At the current market price, any rise within the range of 13,740-13,800 must be utilised to book profits and stay away until the index comes down to the support range.

In conclusion, it is recommended that investors exercise caution while trading in the Nifty Auto Index, given the possibility of resistance in the near term.

By closely monitoring the index's performance, booking profits at the specified range, and accumulating the index once it reaches the support levels, investors can navigate the present market trends with greater ease and mitigate potential losses.

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