Nifty Financial Services Index

The Nifty Financial Services Index, currently trading at 21,198.40, appears to be range-bound on the charts with a range of 21,280 to 21,125. A breakout above or below this range could signal a change in the prevailing trend.

Technical indicators, particularly the Relative Strength Index (RSI), are indicating a downward trend, suggesting potential underperformance in the near term. However, the critical level to watch is 21,125. If the index closes below 21,125, it may indicate further downside potential, with potential support levels at 20,850 and 20,700.

Conversely, a breakout above 21,280 could signal bullish momentum, with the next resistance level at 21,500. Given the uncertainty within the current range, the best trading strategy would be to wait for a clear breakout on the charts before initiating any significant positions.

Traders should closely monitor price movements and technical indicators for confirmation of a breakout before making trading decisions. This cautious approach can help mitigate risks and capitalize on potential opportunities in the market.

Nifty PSU Banks Index

The Nifty PSU Banks Index, currently trading at 7,113.25, is exhibiting a range-bound behavior with a range of 7,150 to 7,075. A breakout above or below this range could provide a directional bias for traders.

Should the index breach the upper bound at 7,150, it may signal bullish momentum with potential resistance levels at 7,265. Conversely, a move below 7,075 could indicate bearish sentiment, with support levels expected around 6,950 and 6,875.

Given the current technical indicators, such as the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI), suggesting a preference for underperformance in the near term, selling on rallies or near resistance levels might be a prudent strategy.

Traders should remain vigilant and adapt their trading approach based on the index’s behavior within the specified range. Confirmation of a breakout or breakdown, coupled with sustained momentum, should guide trading decisions to capitalize on potential opportunities while managing risks effectively.

(Ravi Nathani is an independent technical analyst. Views expressed are personal).

First Published: Apr 02 2024 | 6:31 AM IST

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