Short-Term Trends in Nifty 50: Crafting a Prudent Trading Strategy

As the Nifty 50 Index stands at 21,782.50, a discernible near-term downtrend is evident on charts, prompting a strategic assessment of potential market movements. The critical factor to consider is the formidable resistance zone projected between 21,850 and 21,950.

Until the index breaks this resistance level and closes above it, the prospect of a fresh bullish trend remains uncertain. Conversely, a close below 21,650 is anticipated to initiate a corrective phase, unlocking support levels at 21,500, 21,325, 21,075, and 20,800.

Best Trading Strategy: Sell on Rise. Given the prevailing downtrend and the identified resistance zone, the recommended trading strategy aligns with selling on upward movements. Traders are advised to be cautious and monitor the index closely for any signs of a breakout or breakdown.

The identified resistance levels present strategic selling opportunities, capitalizing on the corrective phase in the short term. It is imperative to remain vigilant and responsive to market dynamics, adjusting strategies as the index approaches critical levels.

Nifty Bank Index Analysis: Charting a Strategic Course Amidst Short-Term Ranges

The Nifty Bank Index, currently marked at 45,634.55, finds itself in a range-bound trajectory, encapsulated between 46,200 as resistance and 44,850 as support.

The pivotal trigger for potential short-term market movements hinges on a decisive close either above or below this established range. In the interim, the most prudent trading strategy involves buying in proximity to support levels and selling as the index approaches resistance.

Should the index breach and close above 46,200, the subsequent resistance levels come into focus at 46,700, 47,200, 47,750, and 48,100. Conversely, a breakdown below 44,850 would signal potential bearish sentiment, unveiling support levels at 43,600, 43,000, 42,300, and 40,750.

The optimal course of action in this scenario is to await a clear breakout on the charts before executing trades in accordance with the confirmed market direction. 


Disclaimer: Ravi Nathani is an independent technical analyst. 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: Feb 12 2024 | 7:59 AM IST

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