Nifty trading at upper-band levels, nearing breakout: Check key levels here

Nifty 50 Index

The Nifty 50 Index is currently trading within a short-term range of 22,800 to 21,700. A breakout above or below this range could signal the next directional move for the index. Given that the index is currently trading close to the upper bound of the range, the optimal trading strategy for the near term would be to sell on any rallies. 

Traders should consider placing a strict stop-loss order at 21,800 on a closing basis to manage risk effectively. This stop-loss level serves as a safeguard in case the index moves against the desired direction. During this period of underperformance, the index is expected to find support levels at 22,350, 22,230, and 22,025. 

These levels may act as areas of buying interest where traders can look for opportunities to initiate long positions. It is advisable to place stop-loss orders slightly below the lower range of the consolidation to mitigate potential losses. On the upside, resistance levels for the week are anticipated at 22,600, 22,725, and 22,936. 

These levels could pose challenges for further upward movements in the index, hence reinforcing the selling strategy on rallies. In summary, the recommended trading strategy for the Nifty Index in the near term is to sell on rallies, with a strict stop-loss at 21,800. 

Traders should remain vigilant of price action around support and resistance levels to make informed trading decisions and adapt to changing market conditions.

Nifty Mid Select Index

The Nifty Mid Select Index is currently trading at 11,063.95 and appears to be positioned towards the upper end of its short-term range. This suggests a potential selling opportunity for traders in the near term. 

Given the index's current placement within its range, it is anticipated to underperform and correct in the coming days. This outlook is supported by the observation that the index is confined within a range of 11,200 to 10,200. 

A decisive close above or below this range on a weekly basis will signify a breakout on the charts, providing clarity on the next directional move. Until a clear breakout occurs, the recommended trading strategy is to sell on rallies and book profits. 

Traders should closely monitor price action around support and resistance levels. Buying near support levels and selling near resistance levels aligns with the current range-bound market environment. 

By adhering to this strategy, traders can capitalise on short-term fluctuations within the established range while awaiting a decisive breakout for clearer directional cues. It's essential to remain agile and adapt trading decisions based on emerging market dynamics and technical signals.

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.