Nifty Metal, Energy: Here's how to plan your trade

According to Ravi Nathani, an independent technical analyst, the Nifty Energy index is signalling potential correction, while the Metal index remains bullish.

Nifty Energy index signals potential correction; Traders and investors advised to book profits

The Nifty Energy Index, currently trading at 26,097.70, has reached the upper trendline of the channel pattern on daily charts, indicating a possible correction in the near term.

As such, traders and investors are advised to consider booking profits at the current market price and maintain a cash position. Immediate support is anticipated at 25,700, with the possibility of a further support level at 25,050 if the index breaches the first support on a closing basis. This lower trendline of the channel could serve as a critical reference point for potential price corrections.

 

For swing traders and investors, the recommended trading strategy involves waiting for the correction to materialize and the index to approach the support levels at 25,700 and 25,050. This approach allows for a more calculated entry into the market, minimizing potential risks.

Nifty Metal Index

Nifty Metal index is currently trading at a CMP (Current Market Price) of 6,230.30, and it exhibits a strong support level at 6,180. Traders are advised to consider this level as a strict stoploss, enabling them to buy the index on dips with target levels of 6,350 and 6,400 in the near term.

The market outlook appears bullish, and traders can capitalize on potential upward movements by purchasing at opportune moments when the index dips to the support level.

A successful bounce off this support level can present profitable trading opportunities with the specified targets. However, it is essential for investors to remain vigilant, as a close below 6,110 could lead to a trend change from bullish to bearish.

Monitoring the index closely in relation to this level is crucial when making decisions about booking profits. A trend reversal could prompt investors to reassess their positions and adjust their trading strategies accordingly.

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