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Nifty Energy, Pharma reaching near resistance levels; Check how to trade

Resistance for Nifty Energy index is anticipated around 34,000 and 34,300, signifying potential areas where selling pressure may intensify, as per Ravi Nathani

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Ravi Nathani Mumbai

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Nifty Energy Index: Analysis and Trading Strategy

The Nifty Energy Index currently reflects an upward trend in both the near and short term. However, recent weeks have seen a sharp rally, bringing the index in close proximity to its resistance levels.

In light of this, prudent advice for both traders and investors is to exercise caution and refrain from initiating fresh bullish positions at the current market price (CMP).

For investors, booking profits and adopting a wait-and-watch stance by staying in cash would be a strategic move. On the other hand, traders are advised to sell on upward movements, aligning their strategy with the potential resistance levels ahead.

Resistance for the index is anticipated around the 34000 and 34300 marks, signifying potential areas where selling pressure may intensify.

Conversely, support levels on the charts are projected around 33200, 33000, and 32600. This cautious approach is grounded in the understanding that the recent substantial rally may lead to profit-taking or a consolidation phase.

By avoiding new bullish positions at the current juncture, market participants can navigate potential market shifts and capitalize on more favorable entry points in the future.

In summary, while the Nifty Energy Index exhibits a positive trend, the proximity to resistance levels suggests a degree of caution.

Investors are advised to secure profits and remain in cash, while traders may find selling on rallies to be a prudent strategy. Monitoring key support and resistance levels is crucial for informed decision-making in dynamic market conditions.

Nifty Pharma Index: Key Levels and Trading Strategy

The Nifty Pharma Index, currently priced at 17380, is reflecting a bullish trend in the near term. However, an important development is the index reaching its short-term resistance levels.

Traders should take note of the critical level at 17425, as a close above this point could signal further bullish momentum.

In the event that the index successfully breaks the resistance at 17425 on a closing basis, the next significant hurdle would be at 17900.

This implies that traders with existing bullish positions should closely monitor the price action around 17425, as a breach could open the path for a move towards 17900.

Conversely, should the index fail to surpass the 17425 level and instead trades below 17100, it could attract profit booking and selling pressure.

In this scenario, the next support levels are anticipated around 16600 and 16300.

In summary, traders are advised to be attentive to the pivotal level of 17425. A breakout beyond this point could lead to an extended bullish phase, while a failure to breach may prompt profit booking and a potential shift in market sentiment.

As always, staying informed about these key levels is crucial for making well-timed and informed trading decisions.

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. 

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First Published: Jan 04 2024 | 7:46 AM IST

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