Nifty Metal, FMCG approaching key support levels; trading strategy here

Nifty Metal Index: Buy Near Support for a Technical Bounce

The Nifty Metal Index has been experiencing a downward trend in the near term, as indicated by the recent sharp correction. However, this pullback has brought the index close to critical support levels, making it an attractive buying opportunity for traders. The immediate support is around 9,575, and if the index closes below this level, it could open the doors for further downside targets of 9,450 and 9,275. Should the index fall below 9,300, it would enter an oversold zone, which could trigger a technical bounce, offering a potential upside for traders who buy near these support levels.

The current strategy for traders and swing traders should be to wait for the correction to complete and look to buy near the key support levels mentioned. Though the overall trend is down, a quick technical bounce can be expected if the index is bought around or below the 9,300 level, providing an opportunity for short-term gains. Traders should be cautious and set stop losses to manage downside risk.

Nifty FMCG Index: Buy Near Support Levels for a Rebound
 

The Nifty FMCG Index has also witnessed a sharp decline in the near term, reflecting a downward trend on the charts. However, this correction has brought the index close to a strong support zone, situated between 61,100 and 60,825. Given the proximity to these support levels, a technical bounce could be expected in the near future. Traders and swing traders should take advantage of this by buying the index and its constituents near these levels, as the risk-reward ratio is favourable for short-term trades.

The best trading strategy would be to accumulate positions as the index approaches the support levels, as there is a strong likelihood of a rebound. This approach is particularly beneficial for traders looking for short-term opportunities in an otherwise downward-trending market. However, it is essential to maintain a disciplined approach with stop-losses in place to manage any unexpected downside risks.

Conclusion

Both the Nifty Metal and Nifty FMCG indices are approaching key support levels after recent sharp corrections. While the overall trend is down, these support levels offer potential for technical bounces, making buying near the support zones the optimal trading strategy for near-term and swing traders. Traders should remain cautious and focus on short-term opportunities while monitoring the price action closely around these critical levels.

(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.)