Nifty50 in consolidation mode: Check key support, resistance levels here

Nifty 50 Index

The Nifty 50 Index, currently positioned at 22513.70, is exhibiting a near-term trend characterised by trading within a defined range. This range-bound behavior is also evident on the Relative Strength Index (RSI), a key technical indicator. The identified range spans from 22,300 to 22,625.

A breach above or below this range would signal a fresh directional move on the charts. In the event of a trade above 22,625, the index may encounter resistance levels at 22,680 and 22,825. Conversely, if the index breaks below 22,300, it could find support at 22,200, 22,100, and 21,900 on the charts.

The recent rally in the short term has led to consolidation in the near term, suggesting a potential phase of distribution in the market.

Given this scenario, it is advisable for traders to consider booking profits on upward price movements near the resistance levels. This cautious approach allows traders to secure gains accumulated during the rally. Additionally, traders may opt to initiate fresh short-selling positions if the lower range is breached.

By adhering to this strategy, traders can strategically capitalize on potential profit-taking opportunities near resistance levels while also positioning themselves to benefit from downward movements if the lower range is violated. It is essential for traders to remain vigilant and adapt their trading decisions based on prevailing market conditions and technical signals to effectively manage risks and optimize returns.

Nifty Mid Select Index

The Nifty Mid Select, currently standing at 10,864.95, has recently experienced a rally, positioning it in close proximity to a significant resistance range spanning from 10,950 to 11,050. Within this 100-point range, the index is likely to encounter resistance and selling pressure as traders opt to book profits. It is crucial for market participants to closely monitor this range as it could dictate near-term price action.

Conversely, if the index breaches the support level at 10780, it may signal a bearish sentiment, potentially leading to further downside. In such a scenario, the next support levels on the charts are anticipated to be at 10700 and 10575, respectively.

Given the current market dynamics, the optimal trading strategy would involve seeking opportunities to sell on rallies, particularly as the index approaches or hovers near the resistance range.

Additionally, traders may consider initiating short positions if the index breaks below the identified support level at 10780. By adopting this trading approach, market participants can effectively capitalize on potential profit-taking opportunities near resistance levels while also positioning themselves to benefit from downward movements if the support level is breached.

However, it is essential for traders to remain vigilant and adapt their strategies in response to evolving market conditions and technical signals.


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Disclaimer: Ravi Nathani is an independent technical analyst and does not hold any positions in the Indices mentioned above and this is not an offer or solicitation for the purchase or sale of any security. It should not be construed as a recommendation to purchase or sell such securities.