Here's why you should consider selling PSU, Pvt Bank indices on rallies

According to Ravi Nathani, an independent technical analyst, the Nifty Private Bank index can also be sold at current levels, with 21,250 seen as a crucial support for the index.

Nifty PSU Banks Index

Last close: 3,985.55

Bias: Sell on the rise

After scrutinizing the hourly charts of the Nifty PSU Banks Index, it appears that a formidable resistance level is anticipated within the range of 4,010 to 4,060. Traders are advised to sell their holdings within this range or, in other words, book profits since the index is likely to experience a correction after achieving the target level.

 Furthermore, the first support level is predicted around 3,890, followed by 3,790. This implies that the market is likely to encounter increased buying pressure around these levels, which can be an opportune moment for traders to enter new positions.

Therefore, the most advantageous trading strategy would be to sell near resistance levels and book profits for the near term. This trading technique involves selling positions when prices ascend to the expected resistance levels and aiming to capitalize on the anticipated price correction.

Intraday No Trade Zone: 3,960 - 4,010

Intraday Resistance levels: 4,025 – 4,060 - 4,150

Intraday Support Levels: 3,936 – 3,880 – 3,836

Nifty Pvt Banks Index

Last close: 21,562.95 

Bias: Sell CMP or at Rise

The Nifty Pvt Banks Index is currently trading at 21,562.95, and traders are advised to consider selling their positions at the current market price or at any rise.

The anticipated overbought zone for this index is anything above 21,625-21,750. If the index reaches this level, it is likely to either consolidate or trade sideways before expiry. In the near term, a dip is expected down the line.

According to the charts, the first support level is expected around 21,360, followed by 21,250. It is crucial to note that the trading level of 21,250 would be the last hope for bulls. If the index closes below this level, it will open doors for 21,150 and 21,000. 

Therefore, the most effective trading strategy for traders for the near term would be to sell the index either at the current market price or at any rise with a target expected at 21,360 - 21,250. In case the index falls below this range, the next support levels would be 21,150 and 21,000.

Intraday No Trade Zone: 21,500 - 21,610

Intraday Resistance levels: 21,664 – 21,750 - 21,964

Intraday Support Levels: 21,360 – 21,250 – 21,150

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