Nifty Auto index in 'overbought' zone, time to book profit, suggest charts

At current levels, charts suggest booking profits or even consider short-selling in Nifty Auto index. Support levels on the charts are expected around 13,900 and 13,500

Dalal Street is also worried about the operating profit margins
Web Exclusive

The Nifty Auto Index is currently trading at a CMP of 14,658.30

Ravi Nathani Mumbai

Listen to This Article

Nifty FMCG Index
The Nifty FMCG Index is currently trading at a CMP of 51,462.70. Based on the chart analysis, the index is currently in a range-bound phase with the range defined between 51,725 and 50,550. A close above or below this range would indicate a breakout and establish the next directional move.

On the upside, resistance levels are expected at 52,250 and 53,450. These levels represent potential selling opportunities as the price may face resistance and reverse from these levels. On the downside, support levels are anticipated at 49,964 and 48,736. These levels can be considered as potential buying opportunities as the price may find support and bounce back from these levels.

Given the current scenario, the recommended trading strategy would be to buy near the support levels and sell near the resistance levels until a breakout is witnessed on the charts.

Nifty Auto Index
The Nifty Auto Index is currently trading at a CMP of 14,658.30. Based on the analysis, it is recommended to book profits and avoid trading in this index and its constituents for some time. The index is currently heavily traded and consolidating in the overbought zone. This indicates that the buying momentum has pushed the index to high levels, making it vulnerable to a potential correction or consolidation phase.

To manage risk, it is advisable to set a strict stop loss at 15,075 on a closing basis. This means that if the index closes above this level, it may indicate a further upward move. However, index at current market price signals to book profits or even consider short-selling. Support levels on the charts are expected around 13,900 and 13,500. These levels may act as potential support zones where the index could find buying interest and stabilize. 

Disclaimer: Ravi Nathani is an independent technical analyst. Views expressed are personal. He does not hold any positions in the indices mentioned above.

First Published: Jun 14 2023 | 07:29 AM IST

Explore News