Nifty FMCG may see pullback; Auto index eyes breakout post range-bound move

According to Ravi Nathani, an independent technical analyst, Nifty FMCG index may witness a rebound after finding support at 51,636 and 50,650 levels

Nifty FMCG: Analysing potential pullback scenarios amidst near-term downtrend
 

As per charts, it signals a decline in the near-term for the Nifty FMCG index (last close: 52,369.75). The two possible scenarios after chart analysis could be that, first, the index could find support at 51,636 and experience a rebound. Alternatively, it might find support at 50,650 and then bounce back from there.

If the index finds support at 51,636, the next target resistance could be around 53,000. On the other hand, if the support at 50,650 holds, the pullback might face resistance at levels of 52,500 and 52,900.

Considering these options, the optimal trading strategy at the current market price would be as follows: For risk-tolerant traders, one approach is to consider buying at the first support level (51,636) with a tight stop loss. This strategy is suitable for those comfortable with a higher level of risk.

For swing traders, a more patient strategy is to wait for the index to potentially find support at 50,650. If this happens, it could be an opportunity to accumulate the index and its constituents for a potential pullback. This approach may offer a pullback of more than 4 per cent, providing a potentially attractive profit margin.

In conclusion, the Nifty FMCG index current situation offers traders two potential scenarios for a pullback. Risky traders could consider buying near the first support level, while swing traders might find it more strategic to wait for the lower support level before accumulating for a potential rebound. It is essential for traders to carefully assess their risk tolerance and trading preferences before making any decisions.

Nifty Auto: Exploring breakout potential amid a range-bound movement
 

Currently, the Nifty Auto index (last close: 15,343.65) is confined within a range between 15,500 and 15,300. This range-bound behavior is steering its short-term path and a decisive close above or below this range could lead to notable shifts in direction, making this price range crucial for future moves.

Chart analysis highlights significant levels that could influence the index's journey. On the positive side, resistance is anticipated at 15,690 and higher at 16,050, acting as hurdles for sustained upward progress. Conversely, support is evident around 15,080, with stronger backing projected at 14,875, providing potential entry or exit points.

Amidst this interplay of support and resistance, a prudent trading approach comes to the forefront – waiting for a clear breakout before making substantial trading decisions. This cautious strategy involves observing the index's behavior and patiently awaiting a confirmed breach of the 15,500 - 15,300 range. Once such a breakout occurs, traders can strategically align their trades in the breakout's indicated direction.

The Nifty Auto Index's present range-bound stance holds latent potential for a significant shift in direction. Traders are advised to be patient and watchful, closely monitoring the index's actions within the established range. As the market evolves, a breakout could serve as a signal for traders to seize emerging trends and make well-informed trading choices.

In summary, the Nifty Auto index's current range-bound phase presents a captivating story of potential market dynamics. This period of uncertainty and consolidation could swiftly transform into a noteworthy breakout, underscoring the importance of a watchful trading strategy, attuned to impending signals of change.

Disclaimer: Ravi Nathani is an independent technical analyst. Views expressed are personal. He doesn't hold any positions in the indices mentioned above and this is not an offer or solicitation for the purchase or sale of any security.