Ravi Nathani decodes trading strategies on Nifty metal, consumption

The Nifty metal index is poised for a minor correction in the near-term following a sharp decline, while, Nifty consumption index is exhibiting a range-bound movement in the near term

Nifty metal index: Consolidation with defined range and awaited breakout

The Nifty metal index is poised for a minor correction in the near-term following a sharp decline and subsequent technical bounce. The recent high at 9,130 and the previous low at 8,652 have established a well-defined resistance and support range on the charts.

 

The index is expected to consolidate within this range in the immediate future, with any breakout above or below these levels likely to determine the next directional move. From a technical standpoint, the range between 8,652 and 9,130 should serve as the key focus for traders. A close above 9,130 could ignite bullish momentum, propelling the index toward the next potential resistance levels of 9,300 and 9,500.

 

Conversely, a close below 8,652 might signal additional downside, with the next supports around 8,500 and 8,250. For now, the best trading strategy is to respect this range and adapt positions accordingly. Risk-tolerant traders can buy near the support level and sell near resistance, leveraging the defined range for short-term trades.

 

However, conservative traders and investors are advised to stay on the sidelines until a definitive breakout is observed, which will offer clearer entry and exit points with reduced risk.

 

In summary, the Nifty metal index is in a consolidation phase, with 8,652–9,130 serving as critical levels to watch. While short-term range-bound strategies can yield opportunities, a wait-and-watch approach is recommended for safe traders until a breakout confirms the next trend.

 

Nifty consumption index: Range-bound with opportunities to accumulate on dips

The Nifty consumption index is exhibiting a range-bound movement in the near term, with the defined levels of 11,325 and 11,525 acting as pivotal support and resistance, respectively. A close above or below this range will likely trigger a directional breakout, paving the way for the next phase of movement. If the index breaks below 11,325, the subsequent support levels to monitor are 11,275, 11,215, and 11,130.

 

Traders are advised to keep a strict stop loss at 11,050, as a breach of this level may indicate a deeper correction. However, the long-term chart pattern remains bullish, suggesting the ongoing correction is merely a pullback within a broader uptrend. This presents an opportunity for traders and investors to accumulate positions on dips, leveraging the current weakness for potential long-term gains.

 

On the upside, a breakout above 11,525 could open the path to resistances at 11,800 and 12,040, marking a shift to bullish momentum. The index’s historical performance and technical indicators align with this optimistic outlook, signalling its potential to outperform once the current range is breached positively.

 

For traders, the recommended strategy is to accumulate on dips, with stop losses tailored to individual risk tolerance at either 11,050 or 11,000. While the near-term movement may remain range-bound, the index’s long-term bullish structure offers favorable prospects for those looking to capitalise on pullbacks. Watch for breakout cues at the key levels, as they will dictate the next significant directional move.

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