Time to book profit in Nifty Pharma; Auto index remains bullish

According to Ravi Nathani, an independent technical analyst, stiff resistance for the Nifty Pharma index is anticipated at 15,600 level.

Nifty Auto Index Bullish Bias for near term.

The Nifty Auto Index is currently following an upward trend, contingent on specific resistance points. A close above 16,236 could potentially lead to 16,336. If the index manages to surpass 16,336, the next targets would be 16,481 and 16,564. However, crossing 16,546 would indicate a highly bullish market trend. In this scenario, a sharp rally might occur, potentially reaching 16,880. 

It's crucial to note that this level might also be considered an overbought zone, indicating the need for caution. Investors are advised to consider booking profits at this level. 

The recommended trading strategy involves maintaining a bullish outlook and vigilantly monitoring the resistance levels. Profit booking near these levels is a prudent approach. 

On the downside, if the index trades and closes below 16,135, strong support is anticipated at 16,000 and 15,800 in the near term. By being mindful of these levels, traders can make well-informed decisions, maximizing gains during bullish movements and safeguarding investments in case of market corrections.

Nifty Pharma Index Book Profits & stay in Cash.

The Nifty Pharma Index has recently experienced a sharp rally, propelling it into overbought territory. Given this situation, a prudent trading strategy for investors involves capitalizing on this rally by booking profits on upward movements. 

Stiff resistance is anticipated around 15,600 on a closing basis. To manage risks effectively, traders are advised to consider 15,600 as a strict stop loss. The optimal trading approach is to sell the index and its constituents when prices rise, ensuring profits are secured. 

Potential support levels are projected at 15,300, 15,175, 15,050, and 14,936. Technical indicators, specifically RSI and Stochastic, are signaling signs of profit booking following each surge. Hence, the recommended strategy is to book profits either at the current market price or on any subsequent rises. 

Adopting a cash position for a period can be a prudent move, allowing investors to wait for more favorable market conditions before re-entering the market. 

In summary, a cautious stance is advisable for traders in the pharmaceutical sector. By closely monitoring resistance levels and technical indicators, traders can make informed decisions, maximizing profits and safeguarding their investments in the volatile market environment.

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