 "A man talks on phone at the National Stock Exchange as its new logo for for the benchmark Nifty50 is seen on a glass-wall, in Mumbai")
A man talks on phone at the National Stock Exchange as its new logo for for the benchmark Nifty50 is seen on a glass-wall, in Mumbai
NIFTY 50
The NIFTY 50 index is exhibiting a bullish trend on the charts, making it an attractive option for traders seeking to capitalize on the ongoing upward momentum. The optimal trading strategy in the near term would be to buy the index and its constituents on dips, as all relevant moving averages are aligned in an upward direction, reinforcing the bullish outlook.
Traders should apply a strict stop-loss if the index closes below 24,880, as this could signal a reversal of the current trend. The upside target resistance levels for this strategy are at 25,550, followed by 25,764 and 25,900. These levels are expected to provide significant resistance, and traders should monitor price action as the index approaches these zones for possible profit-taking.
The strong momentum and supportive technical indicators make this a favorable environment for buying on dips, provided risk management is firmly in place. As long as the stop-loss at 24,880 is respected, the upside potential looks promising, and the risk-reward ratio remains favorable for bullish traders in the near term.
NIFTY MIDCAP SELECT
The NIFTY Midcap Select index has recently shown a bullish breakout on the charts, signaling a strong near-term upward trend. This momentum presents an ideal opportunity for traders looking to capitalize on the current market dynamics. A prudent strategy would involve buying the index and its key constituents on dips, as the overall market sentiment supports a continued rise.
However, caution is advised, and traders should implement a strict stop-loss at 12,980, as any closing below this level could invalidate the bullish setup and indicate a potential reversal in trend. The primary target for this upward move lies between 13,475 and 13,575, where the index is likely to encounter significant resistance. If the index approaches this range, traders should monitor the price action closely to evaluate potential profit-taking zones.
The current setup offers an attractive risk-reward ratio, provided that the stop-loss discipline is strictly followed. Staying patient and buying on dips, while keeping an eye on key resistance levels, will be critical for optimizing gains in this bullish phase of the NIFTY Midcap Select.
(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: Sep 16 2024 | 7:05 AM IST
