Nifty 50 staging rebound on charts in near term, buy dips; key levels here

Nifty 50 Index

The Nifty 50 Index, currently trading at 22,055.20, has recently undergone a sharp correction, leading to oversold conditions on near-term charts. This situation suggests that a technical rebound or bounce could be imminent in the near future. Key support levels for the index have been identified at 21,880, 21,780, and 21,700. 

These levels are crucial as they indicate areas where buying interest could potentially emerge, contributing to a bounce in prices. Given the oversold nature of the index and the presence of strong support levels, the recommended trading strategy for traders would be to consider buying the index and its constituents.

 

This can be done either at the current market price (CMP) or on dips toward the identified support levels. Potential targets for traders to consider on the upside include 22,250, 22,364, 22,464, and 22,600. 

These levels represent areas where selling pressure may intensify, offering opportunities for profit-taking. It's important to note that a significant bullish breakout on the charts is anticipated once the index surpasses and sustains trading above the level of 22,136. 

This breakout could signal a shift in momentum and attract further buying interest from traders. 

In conclusion, considering the oversold conditions and strong support levels, along with the potential for a technical bounce, traders may find favourable opportunities to buy the Nifty 50 Index on dips. However, it's essential to remain vigilant and monitor price action closely for any signs of a breakout or reversal in trend.

Nifty Mid Select Index

The Nifty Mid Select Index, currently trading at 10,877.60, is exhibiting a downward trend on the charts in the near term. Traders may find it advantageous to adopt a strategy of selling on rallies, given the prevailing market conditions. Key support levels for the index are anticipated at 10,600 and 10,475. 

These levels represent potential targets for traders considering a sell-on-rise approach. Traders could look to capitalise on downward momentum by targeting these support levels for potential profit-taking. 

While the overall trend is bearish, it's worth noting that a minor technical bounce could occur within the near term. However, traders should view such bounces as temporary and consider them as opportunities to enter short positions rather than indications of a trend reversal. 

Resistance for the index is expected in the range of 10,975 - 11,025. This range could serve as a potential area for selling pressure to emerge, offering traders an opportunity to initiate or add to short positions. 

In summary, the best trading strategy for the Nifty Mid Select Index in the near term is to sell on rallies, with target support levels at 10,600 and 10,475. Traders should remain cautious of potential resistance levels and utilise them to manage their positions effectively.

(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.)