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Nifty 50 to face resistance at 18,650; Nifty Bank may slip into downtrend

The Stochastic and RSI indicators are showing a downward slope for the Nifty Bank index, indicating a bearish outlook, says Ravi Nathani, an independent technical analyst

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Ravi Nathani Mumbai

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Nifty 50 Index

Last close: 
18534.10

The index is expected to encounter resistance around the 18,650 level. A close above this level would indicate a potential breakout and could pave the way for new highs, with the next target at 18,888. If the index continues to rally, the subsequent target would be 19,400.

On the lower side, if the index breaks below 18,440 and closes below this level, the next support on the charts is expected around 18,100. Traders should closely monitor these support and resistance levels for making informed trading decisions.

Technical indicators such as Bollinger Bands suggest that support is expected around the 18,100 level. However, the Stochastic and RSI indicators are showing a negative trend. Considering the above analysis, the recommended trading strategy would be to closely watch these support and resistance levels and act accordingly when they are violated.

This approach allows traders to respond to potential breakout or breakdown scenarios. In summary, the Nifty 50 Index is expected to face resistance around 18,650, with a close above this level indicating a potential breakout. On the downside, breaking below 18, 440 could lead to further downside pressure, with support expected around 18,100. Traders are advised to closely monitor these levels and trade accordingly, considering the technical indicators and potential price movements.

Nifty Bank Index

Last close: 
43,937.85

The daily chart shows that the Bollinger Bands are indicating strong support around the 43,290 level. A close below this level could potentially find support around 41,825. The Stochastic indicator is showing a downward slope, suggesting that bulls might weaken on price rises. Similarly, the RSI indicator is also sloping downward, indicating a bearish sentiment.

Traders should take these indicators into account when making trading decisions. In terms of price action, it is advisable for traders to keep an eye on the following levels: a close below 43,500 would indicate a downward trend in the near term, while support is expected around 42,950 and 42,050. However, if the index breaches the 44,500 level, the next resistance on the charts would be at 45,500.

In summary, the Bank Nifty Index is currently supported by the Bollinger Bands around 43,290, with potential support at 41,825 if this level is breached. The Stochastic and RSI indicators are both showing a downward slope, indicating a bearish outlook. Traders should be cautious of a close below 43,500, as this would confirm a downward trend. Support levels to watch for are 42,950 and 42,050. Conversely, if the index surpasses 44,500, it could encounter resistance at 45,500.

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

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First Published: Jun 5 2023 | 7:26 AM IST

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