Nifty Bank, Fin Svcs Eye Breakout: Should You Wait Or Buy Near Support?

2 min read Last Updated : Jul 16 2024 | 6:32 AM IST

Nifty Bank Index Analysis

The Nifty Bank Index is currently range-bound on the charts, oscillating between 52,800 and 51,750. A decisive close above or below this range will likely trigger a significant move in the corresponding direction.

Should the index close above 52,800, it will face subsequent resistance at 53,000 and 53,350. Conversely, a close below 51,750 will see the index finding support at 51,200 and 50,800.

Given this defined range, the best trading strategy for traders would be to wait for a clear breakout before making significant moves. This approach helps mitigate risks associated with premature entries and ensures that trades are made in alignment with the market direction.

However, for risk-tolerant traders, a strategy of selling near the resistance levels (the upper end of the range) and buying near the support levels (the lower end of the range) can be employed.

This strategy leverages the predictability of the range-bound behavior, allowing for profitable trades within these defined limits. It is crucial, however, to implement a strict stop-loss based on the range breakouts to manage potential risks effectively.

Nifty Financial Services Index Analysis

The Nifty Financial Services Index is also trading within a defined range, fluctuating between 23,800 and 23,350. A close above or below this range will likely prompt a significant move in the respective direction. If the index breaks above the higher end of the range, it will encounter stiff resistance at 24,050 and 24,350.

On the other hand, a close below 23,350 will result in a breakdown on the charts, indicating a stop-loss trigger for all short-term bullish positions. In this scenario, the next support levels are at 22,500 and 21,600.

The optimal trading strategy for this index would be to monitor these levels closely and trade accordingly. Traders should be prepared to act on a breakout in either direction.

For those willing to take on more risk, selling near the resistance levels and buying near the support levels could prove beneficial. As always, implementing a strict stop-loss based on the breakout levels is essential to manage potential downside risks.

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(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: Jul 16 2024 | 6:32 AM IST