Nifty Pvt Bank, Nifty Fin Services: Here's why you should look to buy

According to Ravi Nathani, an independent technical analyst, Nifty Private Bank index can be bought at existing levels, while one should prefer to buy Nifty Financial Services Index on dips.

Nifty Financial Services Index

The current market price for the Nifty Financial Service Index is 19,537.55. Following a sharp correction, the index is now positioned for a pullback. Notably, resistance on the charts is anticipated at levels around 19,720, 19,925, and 20,200. 

Crucially, all near-term Exponential Moving Averages (EMA's) are signaling an upward bounce, curving upwards from lower levels. Additionally, the MACD histogram indicator has turned positive, trading above the zero level. When combining these indicators with observed chart patterns, a clear trading strategy emerges for both traders and investors. 

In this scenario, the optimal approach is to buy on dips, specifically near the support levels of 19,250 and 19,064. By strategically entering the market at these points, traders and investors can maximize their potential gains. The target levels for this trade are set at 19,720, 19,925, and 20,200, aligning with the resistance levels identified on the charts. 

 

This strategy, rooted in a comprehensive analysis of indicators and chart patterns, allows market participants to make informed decisions, optimizing their trading and investment outcomes amidst the current market conditions.

Nifty Private Banks Index: A Strategic Outlook

The Nifty Private Banks Index, currently trading at 22,671.60, has undergone a notable correction followed by a significant bounce on daily charts, indicating a shift in market sentiment. This rebound marks a potential turning point, suggesting renewed investor confidence in the private banking sector. 

Anticipated resistance levels at 22,925, 23,164, and 23,500 signify key price points to watch. These levels serve as crucial markers, indicating potential hurdles that the index might face as it moves upwards. 

In response to this market landscape, both traders and investors are presented with a strategic opportunity. The optimal trading strategy in this scenario is to consider purchasing the index and its constituent stocks. This strategic move can be executed either during market dips or at the prevailing market price, allowing market participants to enter the market at advantageous positions. 

To manage associated risks effectively, it is imperative to implement a strict stop loss at 22,400. This precautionary measure acts as a safety net, limiting potential losses in case of adverse market movements. 

A comprehensive analysis of technical indicators, including Stochastic, RSI (Relative Strength Index), and EMA's (Exponential Moving Averages), further supports the bullish trend observed in the private banking sector. The alignment of these indicators reinforces the positive market sentiment, providing additional confidence to traders and investors. 

In light of these factors, adopting a bullish stance for both the near and short term is advisable. By aligning their actions with this optimistic sentiment, market participants can strategically position themselves to capitalize on potential upward movements in the index. This strategic approach, rooted in a comprehensive understanding of market dynamics and technical indicators, empowers traders and investors to make well-informed decisions, optimizing their outcomes in the evolving market landscape.

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