Nifty Auto likely to exhibit range-bound trade; FMCG seems overbought

According to Ravi Nathani, an independent technical analyst, the Auto index seems trapped in the 12,950 - 12,830 range. Whereas, the FMCG index is expected to face stiff resistance around 47,200.

Nifty FMCG Index

Last close: 47,022

Bias: Sell on Rise

The Nifty FMCG Index is exhibiting an overall bullish trend. However, traders need to pay attention to the current market conditions and technical indicators to make informed decisions about their trading strategies.

The hourly charts are indicating that the index is currently trading in an overbought zone. Both stochastic and RSI indicators are suggesting that the market is likely to face stiff resistance at the 47,200 level. As such, traders are advised to take a sell-on-rise approach, as a correction is anticipated in the near future.

To manage risk, traders should set a strict stop-loss at 47,200 on a closing basis. This will ensure that any potential losses are minimized in the event that the market behaves unexpectedly. The support levels for the index are expected to be around 46,750, 46,525, and 46,400. These levels can act as a safety net for traders in the event of a market downturn.

Intraday No Trade Zone: 47,125 – 46,975

Intraday Resistance levels: 47,180 – 47,300 - 47,580

Intraday Support Levels: 46,864 – 46,750 - 46,525

Nifty Auto Index

Last close: 12,904.90

Bias: Range-bound

The Nifty Auto Index is currently experiencing a timewise correction, with resistance and support levels set at 12,950 and 12,830, respectively. As a result, the index is currently range-bound and is expected to break out in either direction upon breaching the current range.

If the index breaks above 12,950, it will likely face stiff resistance at 13,125. Alternatively, if it falls below 12,830, it will find support at 12,650.  Given the current scenario, traders are advised to exercise caution and adopt a sell-on-resistance and buy-on-support approach until a clear breakout occurs on the charts.

It is suggested that traders maintain a strict stop-loss at the breakout level to minimize potential losses. Overall, the trend for the Nifty Auto Index remains bullish, and traders should wait for a clear signal before taking any significant positions. While risk-tolerant traders may choose to sell near resistance and buy near support, others should avoid taking any unnecessary risks and wait for a clear breakout to occur.

Intraday No Trade Zone: 12,925 – 12,875

Intraday Resistance levels: 12,950 – 13,050 – 13,125

Intraday Support Levels: 12,864 – 12,830 - 12,725

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