Nifty Financial Services Index
The Nifty Financial Services Index has recently approached its resistance level of 25,000, which is a crucial round figure for short-term traders. This level will serve as a key test for the index, as a close above 25,000 could trigger further bullish momentum, pushing the index higher. However, current technical indicators suggest caution, as the index appears to be overextended.
Traders are advised to book profits at the current market price (CMP) and wait for a potential pullback before re-entering long positions. The best trading strategy in the near term would be to adopt a “sell on rise” approach, as this strategy aligns with the likelihood of a pullback. Support on the charts is expected at 24,425, 24,050, and 23,750, and traders should look for these levels to enter fresh bullish positions. These support levels will provide more favorable entry points for those looking to participate in the next leg of the bullish trend once the market has corrected.
In summary, while the Nifty Financial Services Index remains bullish, profit booking is recommended at current levels. A pullback towards the mentioned support zones is likely, and traders should wait for these levels before adding fresh long positions. For short-term traders, a sell-on-rise strategy with a focus on profit protection and waiting for a better buying opportunity is the most prudent approach.
Nifty PSU Bank Index
The Nifty PSU Bank Index is currently trading within a well-defined range, with support at 6,500 and resistance at 7,100. This range-bound movement indicates indecision in the market, as neither buyers nor sellers are taking full control.
As long as the index stays within this range, the best trading strategy is to buy near the support level of 6,500 and sell near the resistance level of 7,100. A close above 7,100 would act as a bullish trigger, opening the door for further upward movement. On the contrary, a close below 6,500 would suggest a bearish breakdown, potentially leading to more selling pressure.
Traders are advised to closely monitor price action around these levels, as a breakout or breakdown will provide more directional clarity. Until a clear breakout occurs, range trading remains the most effective approach. This means executing buy positions near support and selling near resistance while using tight stop-losses to manage risk in case of unexpected volatility.
(Disclaimer: Ravi Nathani is an independent technical analyst. Views are his own. He does not hold any positions in the Indices mentioned above and this is not an offer or solicitation for the purchase or sale of any security. It should not be construed as a recommendation to purchase or sell such securities.)
First Published: Sep 24 2024 | 6:15 AM IST
