Nifty FMCG index likely to face stiff resistance at 51,000

Meanwhile, charts suggest that the Nifty Metal index too may be due for a reversal or consolidation, says Ravi Nathani, an independent technical analyst.

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Ravi Nathani Mumbai

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Nifty FMCG Index

The current market price (CMP) of the Nifty FMCG Index stands at 50,927.20 On the hourly charts, the index is currently facing a significant resistance level at 51,025. This resistance level is further supported by the Pivot level R1, which is also around 51,000 for the week. Traders should consider this level of 51,000 as a strong resistance level in the near term.

Additionally, the RSI indicator indicates a downtrend in the index, suggesting a bearish sentiment. Given this bearish indication, the recommended trading strategy would be to sell on price rises. It is important to set a strict stoploss at 51,050 on a closing basis to manage risk effectively.

On the charts, support levels are anticipated around 49,825 to 49,250. These levels may provide a potential buffer for the index in case of further downward movement. Traders should closely monitor these support levels for potential buying opportunities or to reassess their positions.

Furthermore, the MACD indicator has also shown a negative indication on the hourly charts. This further reinforces the bearish outlook and suggests that bulls should exercise caution, as bears may dominate the market in the near term.

In summary, the Nifty FMCG Index is currently facing a stiff resistance level at 51,025, with the Pivot level R1 also around 51,000. The index is exhibiting a downtrend according to the RSI indicator.

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Therefore, the recommended trading strategy is to sell on price rises, with a strict stoploss at 51,050 on a closing basis. Support levels are expected around 49825 to 49250. Traders should remain vigilant as the MACD indicator also supports a bearish sentiment, indicating potential market declines in the near term.

Nifty Metal Index

The current market price (CMP) of the Nifty Metal Index is 5,936.55. According to the charts, the index is currently trading in the overbought zone. This indicates that the index has experienced a significant upward movement and may be due for a potential reversal or consolidation.

Given the weakness shown by technical indicators on the charts, the recommended trading strategy for the near term would be to sell on price rises. It is important to note that indicators such as the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Stochastic are all displaying signs of bearishness.

These indicators suggest a negative sentiment for the index and imply that it may underperform in the near term. Support levels on the charts are anticipated around 5,850 and 5,725. These levels may act as potential areas of price stabilization or potential buying opportunities for traders.

In summary, the Nifty Metal Index is currently trading in the overbought zone on the charts. Traders are advised to adopt a sell on rise strategy for the near term. Technical indicators such as RSI, MACD, and Stochastic are displaying weakness, further supporting the bearish outlook. Support levels are expected around 5,850 and 5,725, which may provide potential levels of price support or buying opportunities.

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

First Published: May 31 2023 | 7:16 AM IST

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