'Sell-on-rise' strategy suitable for Nifty Private Bank index: Ravi Nathani

The technical analyst recommends to employ 'sell-on-rise' strategy for Nifty Private Bank, Nifty Consumption indices in the near-term

Nifty Private Bank
Last close: 20,774.2
 

Charts suggest that a potential correction in the near term is imminent for the index. Moreover, hourly charts reveal that the index is approaching a level of stiff resistance at 20,881. This level, therefore, is expected to act as a barrier to upward price movements, and traders should utilise this level as a strict stop loss to minimise potential losses.

On the downside, support on charts is expected around the level of 20,400. This level, meanwhile, is likely to act as a floor to downward price movements, providing traders with a potential entry point for long positions.

However, given the prevailing market conditions, we recommend a sell-on-rise strategy for traders who wish to trade in the remaining days of this week.

Traders should initiate short positions at the current market price or on a rise towards the level of 20,881, utilising this level as a strict stop loss to minimise potential losses. In the event of a downward correction, traders may consider buying at the support level of 20,400.

Intraday No Trade Zone: 20,725 – 20,825

Intraday Resistance levels: 20,881 – 20,981 – 21,125

Intraday Support Levels: 20,695 – 20,650 – 20,550

Nifty Consumption
Last close: 7,197.95

Based on hourly charts, the index is expected to trade with a bearish bias for the remaining days of this week. This is due to the sharp rally observed last week, which has brought the index to a resistance level between 7,225 - 7,255.

The best trading strategy for traders would be to sell on the rise, utilising a strict stop loss within the aforementioned range.

Our target range is expected to be around 7,125 - 7,075. Additionally, it is important to note that trade below 7,155 will likely bring quick selling pressure, and thus, all bulls should maintain a strict stop loss at this level.

This strategy involves selling the index at higher levels, utilising a strict stop loss within the resistance range of 7,225 - 7,255. Our target range for this trade is expected to be around 7,125 - 7,075.

It is important to note that trade below 7,155 will likely bring quick selling pressure. As such, all bulls should maintain a strict stop loss at this level.

Intraday No Trade Zone: 7,185 – 7,210  

Intraday Resistance levels: 7,225 – 7,250 - 7,275

Intraday Support Levels: 7,160 – 7,125 – 7,100  

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