Nifty Bank Index: Healthy Pullback in a Bullish Trend
The Nifty Bank Index is currently trading at 52,989.70, and the near-term trend appears to be down. However, this correction should be viewed as a healthy pullback within an overall bullish structure. The short-term trend remains bullish, and the current downward movement provides a potential opportunity for fresh buying at lower levels. Strong support is expected at 52,500 and 52,000, which are also corroborated by options data from today’s expiry.
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These levels should act as crucial buying zones for traders looking to accumulate fresh positions. The technical indicators suggest a downtrend, which implies underperformance in the near term. Therefore, traders are advised to wait for the index to approach these support levels before initiating any fresh long positions.
The best strategy for the Nifty Bank Index would be to remain patient and stay away from the market until the price reaches the support zones. Buying prematurely could expose traders to additional downside risk. Instead, wait for a decisive test of the 52,500 or 52,000 levels before making any new investments.
Nifty Financial Services Index: Correction Expected, Buy Near Support
The Nifty Financial Services Index is also showing a downward trend in the near term. Support is expected around 24,175, 23,850, and 23,550. The technical indicators suggest that the index is likely to face further correction, with underperformance anticipated in the short term. Given the current market conditions, the best trading strategy is to wait for the index to come down to these support levels before making any fresh purchases. In the meantime, “sell on rise” or “stay in cash” are advisable strategies for near-term traders. The bearish outlook means traders should avoid initiating new long positions until the index finds solid support at the mentioned levels.
Conclusion
For both the Nifty Bank and Nifty Financial Services indices, the short-term trend is bearish, and a correction is expected. In the Nifty Bank Index, key support levels at 52,500 and 52,000 provide ideal buying opportunities for long-term traders. Meanwhile, the Nifty Financial Services Index is likely to face more downside, with strong support expected at 24,175, 23,850, and 23,550. In both cases, waiting for the index to correct and buying near these support levels is the best strategy. Traders should stay cautious, avoid short selling, and wait for better entry points as the market pulls back.
(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 01 2024 | 7:17 AM IST
