Nifty Pharma nears overbought zone after it scales record high, show charts

According to Ravi Nathani, an independent technical analyst, said that Nifty Pharma's recent surge to all-time high signals strong positive sentiment, but proximity to overbought levels needs caution

Nifty Pharma hits new high: Strong uptrend with a cautionary note
 

The Nifty Pharma index (last close: 15,696.85) notched a new all-time high. This suggests a strong positive trend in the charts. However, this recent surge has brought the index close to levels that might indicate that it is becoming overbought, which means one should be a bit careful.

While the current momentum shows a bullish outlook, investors must be mindful of potential risks associated with being too close to overbought territory. This situation calls for cautious consideration of the current market dynamics.

On the charts, a significant barrier to further growth is seen around 15,800. If the index manages to break through this level, it could open the door to even higher levels at 16,100 and 17,000. This highlights the importance of keeping a watchful eye on the 15,800 level, which could serve as a strict stop-loss for any short positions. This cautious approach is important to manage potential losses if the market continues to rise.

On the flip-side, there is a level of support expected at 14,600, which could help cushion the index against potential declines. This support level adds another layer of importance to our understanding of the index's movement.

To sum up, the Nifty Pharma's recent surge to an all-time high signals a strong positive sentiment, but the proximity to potentially overbought levels warrants caution. The resistance at 15,800 and the support at 14,600 are key levels to keep an eye on. Striking a balance between the positive trend and the potential risks is crucial for navigating this market phase.

Nifty Metal moves in a range; watch out for break-out clues

The Nifty Metal index (last close: 6,677.85) is moving within a set range of 6,690 to 6,525. If it crosses this range, either up or down, it could trigger significant shifts in direction, making this range important for future movement.

If the index falls below the lower range, it might find support around 6,500 or 6,380. These levels could slow down any further drop and attract buyers. On the other hand, if the index surpasses the upper range, it could meet resistance around 6,790 or 6,949. These levels could make it harder for the index to go higher, leading to a potential reassessment of the situation.

Given this situation, the best strategy is to wait and observe. Waiting for a clear breakout beyond the established range could provide better guidance for making trading decisions. This approach aims to ensure that decisions are based on confirmed trends.

In short, the Nifty Metal Index is currently in a range, and a breakout could bring significant changes. Traders are advised to stay alert and cautious, closely following the index's behavior within the defined range. Once a breakout occurs, it could signal a crucial moment for traders to take advantage of emerging trends and make well-judged trading choices.

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.