Charts show Nifty Realty in 'overbought' zone, adopt sell-on-rise strategy

Ravi Nathani, independent technical analyst said that the Nifty Realty index has entered an overbought zone, and therefore, traders must exercise caution in their bullish trading decisions

Nifty Realty
Last close: 446.40

Charts suggest that the index has entered an overbought zone, and therefore, traders must exercise caution in their bullish trading decisions.

The index is projected to remain within the range of 449 and 464, and reach its peak within this range. Following this, it is expected to enter a phase of sideways consolidation or experience a price-wise correction. In this scenario, traders should be mindful of initial support level, which is expected to be situated around 416.

Additionally, based on the current technical indicators such as the overbought RSI and stochastic on the charts, combined with the negative divergence of CCI in the near term, it is recommended that traders sell on the rise and book profits for the near and short term. This strategy will enable traders to mitigate potential losses and capitalise on profitable opportunities.

Nifty Midcap 50
Last close: 9,122.90

Daily and weekly charts signal that the index will witness bullish momentum in the short to medium term. Based on this analysis, traders are advised to purchase the index constituents either at the current market price or during dips, with a target of 9,700 - 10,500 within the short to medium-term horizon.

Technical indicators such as the fresh positive breakout observed on the weekly MACD chart, in addition to the upward movement of the SMA of 20, 30, 50, and 60 days, further bolster this bullish outlook. These indicators suggest that the Nifty Midcap 50 Index is expected to outperform its peers in the near future.

Hence, the best trading strategy for traders would be to buy the index on dips and hold on to their positions until the price targets are achieved. It is important to maintain a stop-loss at the closing basis of 8,675 to mitigate potential losses in case of a sharp downturn in the market.

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