Nifty Energy, FMCG indices shows signs of consolidation; key levels here

Nifty Energy Index: Consolidation with a Bullish Bias

 

The Nifty Energy Index is currently in an oversold zone, as suggested by technical indicators like the MACD and RSI. This signals that a consolidation phase with a bullish bias may unfold in the near term. Traders should consider buying the index and its constituents at lower levels during this consolidation period. The range-bound movement for the index is expected to be between 40,150 and 39,600. A close above or below this range could trigger a directional move. In terms of resistance, key levels to watch are 40,400, 40,700, and 41,400. The best strategy would be to buy on dips within this range, as a positive divergence could be observed even in the event of a negative breakdown. The overall outlook remains cautiously optimistic, with a preference for accumulation at lower levels, anticipating a potential upside breakout.

 

Nifty FMCG Index: Oversold with a Bounce on the Horizon

  The Nifty FMCG Index has experienced a sharp fall, bringing it close to oversold levels. The range between 57,800 and 58,100 is expected to act as an attractive buy zone for near-term traders, as a technical bounce could be imminent. The first resistance level for this anticipated bounce would be around 59,900, making it an ideal profit-taking zone for traders entering near the support levels. Traders are advised to adopt a buy-on-dips strategy with a stop-loss placed at 57,800 on a closing basis. Should the index break below this key support, a strong support level is expected around 57,000. This presents a good opportunity for traders to accumulate positions, as the index is nearing levels where a technical rebound is likely. Keeping an eye on price action around these support and resistance levels will be key for successful trading in the near term.

 

In summary, both the Nifty Energy and FMCG indices are showing signs of consolidation and oversold conditions, making them attractive for traders looking to buy on dips. While the Energy Index suggests a sideways movement with potential upside, the FMCG Index is poised for a technical bounce, offering opportunities for traders to capture near-term gains.

 

(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.)