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Bias for Nifty PSU Bank turns negative, can dip up to 5%

On the upside, the PSU Bank index is likely to face resistance around 7,280 to 7,350, says Ravi Nathani, an independent technical analyst.

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Ravi Nathani Mumbai

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Nifty PSU Bank Index
Last close: 7,101.40

The Nifty PSU Bank Index, currently at a CMP (Current Market Price) of 7,101.40, displays a discernible negative bias in daily closings following a notable rally in the near term.

This suggests a prevailing sentiment that bears are anticipated to exert more influence than bulls in the near term, signaling a preference for a "sell on rise" strategy.

Looking at the support and resistance levels on the charts for the upcoming week, support is expected to be observed at 6,925 and 6,720. These levels are crucial indicators for potential pullbacks and should be closely monitored by traders.

On the flip side, resistance levels are projected to be within the range of 7,280 to 7,350. Traders should be mindful of these levels as they present challenges for any upward movements and may serve as strategic points for considering sell positions.

In summary, the Nifty PSU Bank Index reflects a negative bias post a sharp rally, favoring bears in the near term. Traders are advised to sell on rise, with support levels expected at 6,925 and 6,720, and resistance anticipated between 7,280 and 7,350. Vigilant monitoring of these levels is essential for making informed trading decisions in the current market conditions.

Nifty Pvt Banks Index
Last close: 23,296.50

The Nifty Private Banks Index, currently at a CMP (Current Market Price) of 23,296.50, prompts the application of a conditional trading strategy. A notable pullback from last week's lows suggests key levels to monitor in the near term.

In the event of a daily close below 23,000, it signals a potential downside with support levels at 22,800 and 22,600. This scenario opens the doors for bearish movements, and traders should be watchful for further downside momentum.

Conversely, a daily close above 23,400 introduces resistance levels at 23,600 and 23,800. Traders should note these levels as potential barriers for any upward movements.

Considering the overall bearish trend on the index charts and the anticipation of underperformance in the short term, a bearish trading strategy is favored. Traders may opt for positions that capitalize on potential downward movements in line with the prevailing trend.

In summary, the Nifty Private Banks Index presents an opportunity for a conditional trading strategy. A close below 23,000 may trigger bearish movements with support at 22,800 and 22,600, while a close above 23,400 could encounter resistance at 23,600 and 23,800. The bearish strategy aligns with the prevailing trend and short-term expectations for underperformance.

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

 

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First Published: Feb 20 2024 | 6:37 AM IST

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