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Sell Nifty Energy, Commodities indices on rise, suggest charts

According to Ravi Nathani, an independent technical analyst, the Nifty Energy index can dip towards the 23,000 level, while Commodities index could test 5,605 on the downside.

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Ravi Nathani Mumbai

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Nifty Energy Index
View: Sell at current market price or on the rise

The Nifty Energy Index, with a current market price of 23,692.15, is currently experiencing a bearish trend on the near-term charts.

This suggests that prices are more likely to decline than rise in the short term. Traders are advised to adopt a selling strategy, taking advantage of any upward price movements to sell their positions. The recommended targets for this selling strategy are around 23,375 - 23,000.

On the other hand, investors may consider accumulating positions around the 23,000 level, as the short-term trend is expected to be bullish. It is important to note that the ongoing correction in the index is viewed as a healthy and temporary pullback within the broader uptrend.

The Relative Strength Index (RSI), currently at 51, indicates a slight decline in momentum. At the same time, the Moving Average Convergence Divergence (MACD) histogram has recently crossed below the zero line, suggesting a potential shift toward bearish momentum. Therefore, the sell-on-rise strategy remains the preferred approach for traders, with the mentioned target levels serving as potential profit-taking points.

Nifty Commodities Index
View: Sell at current market price or on the rise

The Nifty Commodities Index, currently trading at 5,734.50, is currently experiencing a bearish trend in the near term.

This suggests that prices are more likely to decline than rise in the short term. The expected target or support level on the charts is around 5,620.

Several technical indicators, including the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Stochastic, all indicate an underperformance in the index.

Based on this analysis, the recommended trading strategy for traders would be to sell the index and its constituents either at the current market price or on any upward price movement. The target for this selling strategy is set at 5,620 and 5,605, reflecting the anticipated support levels on the charts.

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

 

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First Published: May 19 2023 | 7:18 AM IST

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