Traders can adopt buy-on-dips strategy for Nifty, Nifty Bank: Ravi Nathani

The technical analyst recommends to employ 'buy-on-dips' trading strategy for Nifty, given positive outlook for the index in the short term

Nifty
Last close: 17,359.75

As per charts, the trading strategy recommended for investors' is to buy on dips. This strategy has proved to be the best for traders and investors, given that the index is expected to outperform in the short term.

The technical indicators that support this outlook include the MACD, which has turned positive, and the RSI, which is inching upwards. The short-term moving averages of 10, 25, and 50 are also moving upwards, while the long-term moving average of 200 days is moving flat. This, therefore, indicates that the index's bearish phase seems to be over, and investors must try to accumulate the index and its constituents on every correction.

The best trading strategy for traders, investors, and swing participants would be to buy on dips with a target of 18,100 - 18,440 - 18,650. This target resistance level is predicted based on the analysis of the technical indicators mentioned above.

The report suggests that investors should try to accumulate the index and its constituents on every correction, given the expected outperformance in the short term.

In conclusion, we recommend to employ 'buy-on-dips' trading strategy for the index, given positive outlook for the index in the short term. The technical indicators support this outlook, and the target resistance levels are predicted to be around 18,100 - 18,440 - 18,650.

Nifty Bank
Last close: 40,608.65

According to technical analysis, charts suggest that the index is in a bullish phase. This is a positive sign as the index closed above the EMA of 10, 25, and 50, while the support at EMA of 200 resulted in a sharp bounce in the short term.

Additionally, the MACD histogram has turned positive, and the signal line has crossed the MACD line, indicating an expected bullish phase in the near and short term.

For traders and investors, the best strategy would be to buy on dips with a target of 42,000 and 43,000. The index, therefore, is expected to maintain the bullish phase in the short and medium term, so investors are encouraged to accumulate the index on every correction.

The next resistance level is anticipated to be around 40,800 and 41,600, which is 100 EMA levels and the upper Bollinger Band since the index is currently trading above the middle Bollinger band, which is 20 SMA.

In conclusion, this report recommends investors to adopt 'buy-on-dips' trading strategy, given bullish phase likely in short and medium term.

The technical indicators support this outlook, and the target resistance levels are predicted to be around 42,000 and 43,000.

Investors are advised to accumulate the index on every correction, with a strict stop loss placed below 38,800.

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