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Nifty
Last close: 22,040.70
The Nifty Index, currently at a CMP (Current Market Price) of 22,040.70, recently achieved its highest close, but this doesn’t signify a clear impulsive wave on the charts.
In the near term, Nifty appears to be engaged in a corrective phase marked by an ABC pattern. Consequently, key resistance levels for Nifty are observed at 22,125 and 22,300. In the event that Nifty breaches the 21,800 level, it is anticipated to find support at 21,500, followed by 21,180 and 20,964.
Traders are advised to consider a “sell on rise” strategy, capitalizing on potential downward movements within this corrective phase.
For investors, an alternative approach is suggested. Consider accumulating the index and its constituents when Nifty approaches the mentioned support levels. This strategy aligns with the expectation of finding solid ground around these support zones, potentially presenting favorable entry points for long-term investors.
In summary, while Nifty has achieved a recent high close, the corrective ABC pattern suggests caution. Traders may opt for a “sell on rise” strategy, whereas investors can consider accumulation near identified support levels for potential long-term gains. Monitoring the support and resistance levels closely will provide valuable insights into the evolving market dynamics.
Bank Nifty
Last close: 46,384.85
The Bank Nifty Index, currently trading at a CMP (Current Market Price) of 46,384.85, faces a challenging scenario with a noted resistance zone between 46,580 and 46,980. The index is poised to turn bullish only if this range is convincingly breached. In such a scenario, the next targets on the charts are projected at 47,550 and 47,900.
However, until the resistance range is surpassed, the prevailing sentiment suggests a sell-on-rise strategy. Traders are advised to consider selling with potential target levels at 45,675, followed by 44,875, 44,475, and 43,150. This approach aligns with the expectation of the index experiencing downward movements within the current market conditions.
Monitoring the price action around the specified resistance levels is crucial for traders to assess the strength of any potential bullish breakout. Conversely, the suggested target levels on the downside provide strategic points for traders to consider in their selling approach.
In summary, the Bank Nifty Index is currently contending with a resistance zone, and a breach of 46,580 – 46,980 is essential for a bullish outlook. Until then, the recommended strategy is to sell on rise, targeting downside levels at 45,675, 44,875, 44,475, and 43,150. Careful observation of price movements will be instrumental in making informed trading decisions.
(Ravi Nathani is an independent technical analyst. Views expressed are personal).
First Published: Feb 19 2024 | 6:36 AM IST
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