If Nifty Bank Breaks This Resistance Then It Could Move To 53k; Details

3 min read Last Updated : Oct 16 2024 | 7:34 AM IST

Nifty Bank Index: Consolidation with Range-Bound Movement

The Nifty Bank Index is currently trading in a defined range of 51,825 to 50,200. A breakout above or below this range will provide a clear direction for traders. Until then, the index is expected to remain in a consolidation phase. If the index breaks above 51,825, it could move towards the next resistance levels of 52,325, 52,850, and potentially 53,000.

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Traders can take long positions if a positive breakout above 51825 is confirmed. On the downside, if the index closes below 50200, it would signal a potential correction. However, the 49,750 level is identified as a strong support zone and a “must-buy” level for swing traders and short-term investors.

This area presents an opportunity to accumulate positions for a technical bounce. Best Trading Strategy: As long as the index trades within this range, the best approach would be to sell near the resistance level of 51825 and buy near the support level of 50200. If a breakout occurs in either direction, traders should follow the momentum, with a focus on buying at key support levels during any downside moves.

Nifty IT Index: Range-Bound with Consolidation

The Nifty IT Index is also trading within a defined range of 43375 to 41625, signaling a phase of consolidation. The index is likely to remain within this range for the near term, and traders should wait for a clear breakout to establish new positions. If the index closes above 43375, it could trigger a bullish move, and traders could look for opportunities to buy, targeting higher levels. A breakout could signal renewed buying interest in the IT sector.

A close below 41625 would indicate a negative breakdown, potentially leading to further downside pressure. However, this range-bound movement suggests that support at 41625 should hold in the short term unless the index gives a decisive negative breakdown.

Best Trading Strategy: The index is expected to trade in a consolidation phase over the coming days. The ideal strategy would be to buy near the lower support of the range (41625) and sell near the upper resistance (43375). Risk-averse traders should stay on the sidelines until a clear breakout occurs, allowing the consolidation phase to complete.

Conclusion

Both the Nifty Bank Index and Nifty IT Index are trading in well-defined ranges, indicating a consolidation phase. Traders should adopt a range-bound strategy—buying at support levels and selling at resistance levels—until a clear breakout or breakdown occurs.

(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: Oct 16 2024 | 7:34 AM IST