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Nifty Financial Services Index
The Nifty Financial Services Index, which last closed at 20,862.55, is currently exhibiting a range-bound pattern on charts, delineated by 21,000 on the upside and 20,700 on the downside.
A trade and close above or below this range are considered triggering points, indicating potential directional movements.
Support levels on charts are anticipated around 20400, 20100, and 19825, while resistance is identified at 21500.
The technical indicators, such as RSI (Relative Strength Index) dipping down along with MACD (Moving Average Convergence Divergence), suggest a potential near-term correction.
Given this scenario, the recommended trading strategy is to sell on rallies. Traders are advised to initiate selling positions when the index rises, anticipating a downward correction.
It's also suggested to stay in cash until the index approaches the mentioned support levels. This cautious approach aims to capitalize on potential downward movements while avoiding unnecessary exposure during a corrective phase.
In summary, for the Nifty Financial Services Index, the current range-bound condition and the indications from technical indicators warrant a sell-on-rise strategy.
Staying in cash until the index approaches the identified support levels provides a prudent approach for traders, aligning with the anticipated correction in the near term.
Nifty PSU Bank Index
The Nifty PSU Bank Index, which last closed at 7,225, is currently experiencing a near-term downtrend, as indicated by technical indicators like RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) which are showing a downward trajectory. Support levels are anticipated around 6825, 6636, and 6350.
In light of the prevailing downtrend, the suggested trading strategy for both traders and investors is to book profits and stay in cash.
The rationale behind this strategy is the expectation that the index is likely to underperform the broader market. Selling on rallies or at the current market price (CMP) and staying in cash until a decent pullback occurs, and the index is trading close to the identified support levels is advised.
This cautious approach aims to mitigate risks associated with the ongoing downtrend and provides traders and investors with the flexibility to re-enter the market at more favorable levels.
In summary, the Nifty PSU Bank Index is currently in a near-term downtrend, and the recommended trading strategy involves booking profits, selling on rallies or at CMP, and staying in cash until a substantial pullback occurs and the index approaches the identified support levels.
This strategy aligns with the indications from technical indicators and provides a prudent approach for navigating the current market conditions.
Disclaimer: Ravi Nathani is an independent technical analyst. 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.
