Nifty Pharma likely to weaken in near-term; adopt sell on rise approach

Nifty Pharma is weak on hourly charts. Traders should be cautious and sell on every rise, while Nifty Energy Index is in a range-bound phase, says Ravi Nathani

Nifty Energy Index

Last close: 24,215

On the charts, the Nifty Energy Index is in a range-bound phase. The upper range is around 24,317, while the lower range is near 23,692. A breakout above or below these levels would indicate a shift in the market trend. Given the current range-bound conditions, the best trading strategy would be to buy near the support levels and sell near the resistance levels.

Traders should closely monitor the price action and wait for a breakout before taking larger positions. In the event of a breakout above the upper range, the next resistance on the charts is expected around 24,930. On the other hand, if the index breaks below the lower range, support is expected around 23,000.

Nifty Pharma Index

Last close: 12,911.35

Based on the hourly charts, there has been a negative breakdown in the index, suggesting that both the index and its constituents are likely to face downward pressure in the near term. Traders and investors should be cautious.

Support levels on the charts are expected around 12,690, 12,575, and 12,450. These levels could potentially act as a floor for the index during its decline. Technical indicators such as RSI, Stochastic, and MACD are all showing a downward slope, indicating bearish momentum in the index.

This further supports the negative outlook. For traders, it is recommended to sell on any rise in the index, while maintaining a strict stop loss of 13,100. This will help manage the risk in case of any unexpected upward movement.

In summary, the Nifty Pharma Index is currently showing signs of weakness on the hourly charts. Traders should be cautious and consider selling on rallies, while maintaining a stop loss at 13,100.

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