Nifty expected to consolidate; Look to buy Bank Nifty on dips

Nifty 50 Index Range bound on charts

As of the current market data, the Nifty 50 Index stands at 19,047.25. Following a sharp near-term correction observed in the charts, the index is now poised for a consolidation phase within a specific range.

The prevailing market sentiment suggests a bullish bias in the near term with an anticipating the index to move within the range of 19,350 to 18,800. In this context, a key trading strategy emerges: traders are advised to observe the market closely and act prudently within this range. 

It is optimal to consider selling near the resistance level, located at the higher end of the range, and conversely, buying near the support level, positioned at the lower end of the range. This strategy aligns with the market's current dynamics, allowing traders to capitalize on potential price fluctuations within this specified range. 

Until the index demonstrates a significant deviation from this range, this approach offers a balanced and strategic method for traders to navigate the market effectively. By selling near the upper boundary and buying near the lower boundary, traders can optimize their trading decisions in response to the ongoing market conditions.

Nifty Bank Index Buy on dips within the said consolidation

The current market position for the Nifty Bank Index is at 42,782.00. The index has exhibited a range-bound behavior on the charts, fluctuating between 42,950 and 41,900. This established range is anticipated to persist in the near term, indicating a period of consolidation for the index. 

Given the recent sharp correction observed in the market, a prudent trading strategy emerges. Traders are advised to consider buying on dips within this consolidation phase. The strategy involves capitalizing on price declines within the specified range. With a careful approach, traders can aim for a target of 43900 in the short term. 

This approach aligns with the current market dynamics, allowing traders to make strategic moves in response to the index's fluctuating patterns. By purchasing during dips, traders position themselves strategically to benefit from potential upward movements within this consolidation range, maximizing their gains in the short term.

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