Nifty Commodities Index
The Nifty Commodities Index is showing signs of a potential pullback in the near term, making it a suitable candidate for selling on rises. Having achieved its near-term targets, the index is expected to undergo profit booking. Support levels on the charts are identified at 9,350 and 9,200. These levels represent potential targets for the expected pullback.
The best trading strategy for the near term would be to sell the index on rises or near the resistance levels, which are placed at 9,865 and 9,925. Given that all leading technical indicators are currently overbought, a correction and underperformance in the near term are anticipated. Traders should focus on selling or booking profits on rises and wait for the correction to reach the support levels before considering fresh buy positions. This approach allows traders to capitalise on the overbought conditions and prepare for a potential pullback, ensuring better entry points for future investments.
Nifty Consumption Index
The Nifty Consumption Index is trending bullish on the charts, with resistance levels expected at 12,025 and 12,125 for this month. The index has experienced a superb rally in the near term, which suggests that profit booking could be anticipated soon. For those looking to invest fresh in this index, it is advisable to wait for a pullback or for the index to reach its support levels, which are expected between 11,400 and 11,200.
The best trading strategy would be to buy the index around these support levels, as the overall trend remains bullish on the chart. The index and its constituents are expected to outperform in the short term once the pullback phase concludes. By waiting for the index to correct and reach the support levels, traders and investors can enter at a more favourable risk-reward ratio, aligning with the bullish trend and maximising potential returns.
In summary, the Nifty Commodities Index is poised for a near-term pullback, with support at 9,350 and 9,200 and resistance at 9,865 and 9,925. Selling on rises or near resistance levels is recommended. The Nifty Consumption Index remains bullish, with resistance at 12,025 and 12,125 and support expected between 11,400 and 11,200. Waiting for a pullback before initiating fresh buy positions is the best strategy to capitalise on the ongoing bullish trend.
(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: Aug 02 2024 | 6:12 AM IST
