Nifty Pharma Rangebound, Eyes Breakout; Check Support, Target, And More

3 min read Last Updated : Oct 11 2024 | 7:26 AM IST

Nifty Energy Index: Buy on Dips Amid Expected Consolidation

Following a sharp correction, the Nifty Energy Index is now expected to enter a phase of consolidation. This offers a good opportunity for traders to accumulate positions on dips as the overall bias remains positive. The index is likely to trade within a defined range, making buy on dips the most effective trading strategy for both short-term and swing traders. Key support levels are identified at 41,335, 41,200, and 40,975.

These levels are expected to provide strong buying opportunities as they represent areas of accumulation where the risk-reward ratio is in favor of buyers. On the upside, resistance is expected at 42,250, 42,725, and 43,200. These resistance levels will act as potential profit-booking zones for traders.

The anticipated consolidation range for the index is between 42,250 and 41,335. A trade above or below this range would trigger momentum in the direction of the breakout.

Until then, traders should focus on buying near the support levels and taking advantage of any dips for short-term gains. The overall trend remains positive, and the index could resume its upward movement once the consolidation phase is complete.

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Nifty Pharma Index: Range-Bound, Awaiting Breakout

The Nifty Pharma Index is currently trading within a well-defined range between 23,800 and 22,700. A breakout above or below these levels will likely trigger a directional move, and traders should adopt a strategy that aligns with this range-bound movement.

For risk-averse traders, the best approach would be to wait for a breakout before entering new positions, as a close above 23,800 would signal bullish momentum, while a break below 22,700 could initiate a bearish move. Risk-tolerant traders, however, can employ a sell near resistance and buy near support strategy.

Selling near 23,800 with a tight stoploss could yield profits in the short term, while buying near 22,700 offers a low-risk entry point for long trades.

In the event of a breakout, the direction of the trade will be dictated by the index closing above or below the range. Until that happens, the best trading strategy for the Nifty Pharma Index is to capitalize on the range by selling near resistance and buying near support.

Conclusion

The Nifty Energy Index is expected to consolidate between 42,250 and 41,335, with buy on dips being the preferred strategy for traders looking to benefit from the expected positive bias. The Nifty Pharma Index, on the other hand, remains in a tight range between 23,800 and 22,700. Traders can either wait for a breakout or use the range to trade by selling near resistance and buying near support.

(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 11 2024 | 7:26 AM IST