Nifty Midcap 50 weekly chart signals caution; watch out for these levels

According to Ravi Nathani, an independent technical analyst, while the Nifty Midcap index has strong resistance around 10,125 level.

Nifty Midcap 50 Index

The Nifty Midcap 50 Index is currently trading at a CMP (Current Market Price) of 9,911.45. Based on the analysis, there is a strong resistance level expected around 10,125. The index has recently reached a high of 10,081, which could potentially be the near-term high for this swing, especially considering the bearish reversal pattern observed on the weekly charts, known as a Gravestone Doji.

Given the selling pressure witnessed in the weekly candle, it indicates a bearish reversal, suggesting a potential shift in the trend. Swing traders are advised to book profits and exercise caution, as the index is expected to consolidate with a negative bias in the coming days.

Furthermore, the Relative Strength Index (RSI) on the weekly charts is currently above 75, indicating an overbought condition. This suggests that the RSI may cool off in the future, potentially leading to a decline in the index.

Support levels on the charts are anticipated in the range of 9,350 to 9,150. It is recommended to consider selling near the resistance area as the index approaches it. The resistance levels to watch are 10,125 and 10,575. Traders should monitor the price action closely and adjust their trading strategies accordingly.

Nifty Energy Index

The Nifty Energy Index is currently trading at a CMP (Current Market Price) of 24,607.80. The daily chart indicates a bullish trend for the index. However, when looking at the near-term hourly charts, there is a strong support level around 24,500. If the index breaks and closes below this level, it could trigger a correction in the chart, with further support expected at 24,275.

On the upside, there is a stiff resistance level at 25,025. Traders should closely monitor the price action around these levels and consider them as key points for making trading decisions. If the index surpasses the resistance level, it may indicate a continuation of the bullish trend.

The recommended trading strategy would be to closely adhere to these support and resistance levels and take trades accordingly. Traders should consider buying or selling positions based on the violation or breakthrough of these levels on the charts.

(Ravi Nathani is an independent technical analyst. Views expressed are personal).