Should investors book profits in Nifty PSU, Pvt Bank? Insight from charts

Nifty PSU Bank Index Analysis:

The Nifty PSU Bank Index is currently trading at 7,178.00. The near-term trend on the charts indicates a downward movement. Given this bearish outlook, the most prudent trading strategy would be to sell on any rise in the index's value. The index is expected to find support at the levels of 6,925 and 6,500.

Technical indicators, including RSI, MACD, and Stochastic, are signaling an underperformance in the near term. This suggests that the index is likely to face further downward pressure. Therefore, selling on rises would be the optimal strategy to capitalize on the anticipated decline.

In summary, with the Nifty PSU Bank Index showing signs of a downtrend and technical indicators supporting this outlook, the best trading strategy is to sell on rises.

Traders should look for opportunities to short the index as it approaches resistance levels, with an eye on the support levels of 6,925 and 6,500 for potential profit targets. This approach aligns with the technical signals and the expected market behavior in the near term.

Nifty Pvt Banks Index Analysis:

The Nifty Pvt Banks Index is currently trading at 25,979.05. In the near term, profit booking is likely as indicated by the MACD, which shows signs of underperformance on the charts. This suggests that the index may face downward pressure in the coming days. The best trading strategy, in this case, would be to sell on rises, with a stop-loss set at 26,350 on a closing basis. The target or support levels to watch for this strategy are 25,700 and 25,200.

Additionally, the RSI is dipping along with the MACD, further supporting the outlook for potential declines. Given these technical signals, selling on rises would be the optimal approach for trading the Nifty Pvt Banks Index in the near term.

Traders should look for opportunities to short the index as it approaches resistance levels, with an eye on the support levels of 25,700 and 25,200 for potential profit targets.

This strategy aligns with the current technical indicators and the expected market behavior, allowing traders to capitalize on the anticipated profit booking and underperformance.

In summary, with the MACD and RSI both indicating a bearish outlook, the recommended trading strategy for the Nifty Pvt Banks Index is to sell on rises. This approach aims to take advantage of the expected profit booking and secure gains by targeting the identified support levels.

(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.)