Nifty Financial Svcs eyes key support level: check trading strategy here

Nifty Financial Services Index: Approaching Key Support Levels, Buy on Dips

The Nifty Finance Index has experienced a sharp correction over the past seven days, bringing it close to critical support levels at 23,000 and 22,500. As the index nears these levels, it is expected to enter an oversold zone, making it an attractive buy for both near-term and short-term traders.

These levels offer an excellent opportunity for swing traders to accumulate the index and its constituents, as buying interest is likely to emerge. For traders looking to capitalize on the anticipated bounce, profit booking should be targeted around resistance levels at 23,850 and 24,000.

The "buy on dips" strategy is highly recommended at or near the mentioned support levels, as the risk-reward ratio favors accumulation for a technical rebound. Investors can also consider building positions at these levels, expecting a short-term upward movement.

Nifty PSU Banks Index: Underperformance Expected, Wait for Support or Breakout

The Nifty PSU Banks Index is in a downtrend in the near term, signaling continued underperformance for the next few trading sessions. The index is approaching support levels at 6,400 and 6,275, where traders should consider accumulating positions. Until the index reaches these levels, it’s best to wait for the correction to fully play out before initiating new trades.

On the upside, if the index breaks and closes above 6,900, it would signal the end of the current corrective phase, and the index could head towards higher levels in the short term. In such a scenario, buying above 6,900 would be an ideal strategy for traders looking for a bullish entry. However, until the breakout occurs, the best approach is to either accumulate at the support levels or wait for the index to close above 6,900 for confirmation of a trend reversal.

Conclusion

The Nifty Finance Index is approaching crucial support levels at 23,000 and 22,500, presenting a strong "buy on dips" opportunity for traders and investors. Resistance should be expected at 23,850 and 24,000, where profits can be booked. On the other hand, the Nifty PSU Banks Index is still in a correction phase, with support at 6,400 and 6,275.

Traders should either wait for the correction to complete before accumulating or look for a close above 6,900 to confirm a bullish reversal. In both cases, patience is key as the indices approach significant levels for short-term trading strategies.

(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.)