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Trading guide for Nifty Pharma, Media indices for the near-term

According to Ravi Nathani, an independent technical analyst, the Nifty Pharma and Media indices are likely to consolidate, with the latter likely to trade with a negative bias.

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Ravi Nathani Mumbai

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Nifty Pharma Index: Navigating Consolidation Amidst Market Sentiments

The Nifty Pharma Index, currently standing at 15,282.50, has drawn attention for its recent consolidation on the charts. This pattern suggests a phase of range-bound movement that traders and investors should be mindful of.

The projected range for this impending consolidation is between 15,175 and 15,450. Such consolidation periods often imply a market that is temporarily content with its current valuation, potentially leading to muted price movements.

However, what's noteworthy is the anticipated bias in this consolidation. Market sentiment leans towards a negative bias, suggesting that the index might be more inclined to experience downward pressures than upward gains.

A crucial level to watch out for is the support at 15,175. Should the index breach and close below this level, it could trigger a chain reaction of selling pressures.

In this scenario, the next support levels are expected to be around 14,560 and 14,050, acting as potential buffers against further declines.

In conclusion, the Nifty Pharma Index at 15,282.50 is indicating a consolidation phase with a negative bias on the horizon. The projected range of 15,175 to 15,450 highlights the potential boundaries within which the index might move.

Traders and investors are advised to closely monitor the support level of 15,175, as its breach could dictate the index's near-term direction.

Nifty Media Index: Time to Secure Profits Amidst Notable Negative Divergence

In the realm of the Nifty Media Index, the current mark stands at 2,273.70, drawing attention to a pivotal development on the charts. A distinct negative divergence pattern has emerged, hinting at a potential shift in the market's course.

The recent rally observed in the near term has propelled the index towards a significant resistance level. This resistance band spans from 2,290 to 2,310, signifying a crucial juncture for traders and investors.

In this context, it's important to adopt a prudent approach. Given the culmination of factors, I advocate a cautious strategy: it's an opportune moment to consider booking profits and holding onto cash. This tactical move is advantageous as it not only safeguards the gains attained during the rally but also enables a more comprehensive evaluation of unfolding market dynamics.

An additional aspect supporting this approach is the anticipation of a potential correction within the index. Corrections are instrumental in ensuring market equilibrium and laying the foundation for sustained upward trends.

To sum up, the Nifty Media Index's current position at 2,273.70 invites a critical decision-making juncture. The evident negative divergence and the looming resistance level underscore the prudence of a vigilant stance. Advising profit booking and a watchful wait for a potential correction aligns with strategic risk management and prudent market conduct.

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

 

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First Published: Aug 24 2023 | 7:17 AM IST

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