Nifty Auto, Energy indices: Buy on dips suggested; check key levels here

Nifty Auto Index: Buy on Dips for Potential Upside

The Nifty Auto Index is currently positioned at a key juncture on the charts, presenting an opportunity for traders to buy on dips. The index has a critical support level at 25,500, and a close below this could trigger a deeper pullback, with the next support levels at 25,250 and 24,800. However, the technical indicators, particularly the RSI, suggest that the index is nearing the oversold zone, which increases the probability of a bounce.

On the upside, resistance is expected at 25,150, 26,275, 26,400, and 26,550. Traders should maintain a strict stop loss of 25,750 on a closing basis to protect against downside risk. Given the current market conditions, buying on dips appears to be the most favourable strategy, especially since the Auto Index has shown signs of potential support at lower levels. The technical structure indicates that there is room for a rebound if the index finds stability near its current support levels, and it could aim for higher resistances as buyers step in.

Nifty Energy Index: Outperformance Expected, Buy on Dips

The Nifty Energy Index has experienced a sharp correction recently but now appears to be consolidating within a narrow range between 41,975 and 41,000. The index is in an oversold zone, making it an attractive buy for traders looking to capitalise on a potential rebound. The consolidation at these lower levels indicates that the index could soon break out of this range, and a rally may follow.

For now, the best trading strategy is to buy on dips or upon a breakout above the upper range. If the index manages to breach the resistance levels at 42,250, 42,700, and 43,180, it would confirm a bullish breakout, opening doors for further upside. Conversely, should the index retrace, it is likely to find strong support around 41,000 and could present another buying opportunity. Overall, the Nifty Energy Index is expected to outperform in the coming days as it consolidates at lower levels. Traders should remain vigilant and accumulate positions during pullbacks, targeting the resistance zones for profit-taking. Given the oversold conditions on technical indicators, this index holds potential for a positive move in the near term.

Conclusion
Both the Nifty Auto and Nifty Energy indices offer compelling opportunities for buy-on-dips strategies. The Auto Index has immediate resistance but appears ready to bounce from oversold levels, while the Energy Index is consolidating and could soon break out, offering upside potential for traders.

(Disclaimer: Ravi Nathani is an independent technical analyst. Views are his own. He 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.)