Nifty in overbought zone, Wait for dips in Nifty Bank before fresh buying

An optimal approach for Nifty Bank involves patiently awaiting dips and pullbacks to key support levels situated at 46,300, 45,825 and 45,410, says Ravi Nathani

Nifty 50 Index: Navigating New Highs with Strategic Profits

The Nifty 50 Index continues its bullish trajectory, marking yet another new lifetime high on both short-term and near-term charts. Despite the prevailing bullish trend, the ascent towards 21100 presents a formidable challenge, acting as a stiff resistance barrier.

The index is currently hovering in what appears to be a near-term overbought zone, signaling the likelihood of profit booking in the upcoming rises. Traders are strongly advised to exercise caution and consider booking profits at these elevated levels.

The strategic move is driven by the anticipation of a short-term correction amid the overbought conditions. To capitalize on potential pullbacks, traders and investors are encouraged to initiate fresh buying positions near key support levels at 20850, 20600, and 20250.

While the short-term outlook suggests a potential correction, the overall trend remains bullish, with the possibility of the index reaching 22000. Therefore, the most prudent trading strategy for market participants involves buying on dips near the identified support levels.

This approach not only aligns with the broader bullish sentiment but also strategically positions traders and investors to capitalize on upward movements while effectively managing risks associated with the near-term overbought conditions.

Nifty Bank Index: Soaring to New Heights with Bullish Momentum

The Nifty Bank Index has achieved a remarkable new high, reinforcing its bullish trend with robust momentum.

Given the prevailing strength, adopting a short position is not advisable. Instead, traders are encouraged to identify opportunities to accumulate the index and its constituents.

The optimal approach involves patiently awaiting dips and pullbacks to key support levels situated at 46300, 45825, and 45410. While the overall trend remains bullish, it's crucial to acknowledge the significance of breaching the 47400 mark decisively.

Until such confirmation is observed, expectations for fresh bullish momentum should be tempered. If, however, the index successfully surpasses and sustains levels above 47400, the next targets or resistance on the charts are anticipated around 48900.

In light of these dynamics, the best trading strategy for market participants involves considering fresh buying positions either above 47400 or during pullbacks to the identified support levels.

The caution against initiating short positions is underpinned by the robust bullish momentum observed on the short-term charts, emphasizing the strategic advantage of aligning trades with the prevailing upward trajectory.

Disclaimer: Ravi Nathani is an independent technical analyst. 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.