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Nifty FMCG looks weak; PVT Bank Index likely to outperform: Ravi Nathani

The Nifty Pvt Bank index can rally to 20,425 and 20,775 in the short-term.

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Ravi Nathani

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NIFTY FMCG INDEX
Last close: 45,017.60

The NIFTY FMCG Index is currently trading at a CMP (Current Market Price) of 45017.60. However, the index is showing signs of a possible breakdown as it has been facing stiff resistance at around 45,125 for the last five hours.

On the other hand, it has a strong support level of around 44,980, resulting in a range-bound trade pattern with an overall bearish trend. Traders are advised to keep a close eye on the support level of 44,980, as a close below this level could trigger panic for long positions.

This could result in a sharp correction in the stock prices, which are expected to find support at around 44,775 and 44,625. Technical indicators on the index such as the Moving Average Convergence Divergence (MACD) and Bollinger bands suggest a bearish momentum.

Hence, considering all the parameters, the best trading advice for traders would be to sell on the rise post violation of the support level of 44,980. The short-term trend on charts is bearish, and the index and its constituents are expected to underperform the market in the near term.

In conclusion, the NIFTY FMCG Index is currently exhibiting a range-bound trade pattern with an overall bearish trend. Traders are advised to be cautious and sell on rise post violation of the support level of 44,980, as the short-term trend on charts is bearish, and the index and its constituents are expected to underperform the market in the near term.

NIFTY PVT BANKS INDEX
Last close: 20,083.05

The NIFTY PVT BANKS Index is currently trading at a CMP (Current Market Price) of 20,083.05. Looking at the charts, it is evident that the index is a good buy option during dips as it is expected to outperform the markets.

Technical indicators such as the Moving Average Convergence Divergence (MACD) have turned positive and given a breakout on the histogram, indicating a bullish trend. The 20-day simple moving average (20DSMA) has also been violated on charts, adding to the bullish momentum.

Furthermore, the Bollinger bands and Relative Strength Index (RSI) are trending upwards, further indicating a positive outlook for the index. Therefore, the best trading strategy for all swing traders would be to buy the index and its constituents at the current market price or during dips with a target expected at 20,425 and 20,775 in the short term.

In conclusion, the NIFTY PVT BANKS Index is expected to outperform the markets, and technical indicators such as the MACD, 20DSMA, Bollinger bands, and RSI support a bullish outlook. Swing traders are advised to buy the index and its constituents at the current market price or during dips with a short-term target of 20,425 and 20,775.

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

 

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First Published: Mar 29 2023 | 7:30 AM IST

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