Nifty FMCG, Metal: Guide to plan your trading strategy

According to Ravi Nathani, an independent technical analyst, the Nifty FMCG index seems range-bound, while the Metal index looks bullish.

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Ravi Nathani Mumbai

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Nifty FMCG Index: A Range-Bound Scenario

The Nifty FMCG Index, currently positioned at 51,223.05, reflects an intriguing trading situation that points towards a range-bound movement.

Let's delve into the details of this analysis, keeping in mind that this assessment comes from a market observer. The index is found oscillating within a range, with a lower limit marked at 51,125 and an upper boundary at 52,325. This range serves as a crucial pivot, as any price movement that crosses these boundaries is anticipated to ignite significant directional shifts.

For those following this index, these range levels become vital indicators of potential price action. Taking into account the present context where the index is hovering close to its lower range, a compelling strategy emerges. Risk-tolerant traders might consider opportunistically buying on price dips. This strategy is further fortified by a prudent stop loss set at the lower range level, namely 51,125.

The aim here is to capture potential gains as the index bounces back towards the upper range, reaching 52,325. 

On the flip side, cautious traders could opt for a more conservative approach. They might choose to remain on the sidelines until a clear breakout occurs, signifying a move beyond the established range. This wait-and-see stance aligns with a disciplined trading approach, where confirmation is sought before engaging in trades.

In the event of a lower range breach, support levels are projected at 50,800 and 50,465, offering potential cushions to any downward movement. Conversely, should the index break through the upper range, resistance levels to monitor are projected at 52,600 and 53,000.

In essence, the Nifty FMCG Index's current status embodies a range-bound dynamic, offering traders various strategies based on their risk appetite. While the specifics of market movements can be unpredictable, having a clear understanding of these levels equips traders with valuable insights for informed decision-making.

As always, it's crucial to remember that market scenarios can change rapidly, and staying well-informed remains the key to successful trading.

Nifty Metal Index: A Bullish Outlook

The Nifty Metal Index, currently situated at 6,616.70, has caught the attention of market observers due to its near-term bullish trend. A close examination of the charts reveals a bullish inclination in the near term for the Nifty Metal Index. 
Traders looking to capitalize on potential gains are advised to adopt a strategic approach. To mitigate risk, setting a strict stop loss at 6,500 is recommended. This step serves as a safeguard against unforeseen downward movements.

One enticing trading strategy emerges from this analysis: buying the index on price dips. The aim is to seize opportunities as they arise, with an eye on a target range of 6,665 and 6,680. It's essential to highlight that the potential for fresh buying activity becomes apparent once the index surpasses the 6,680 mark on a closing basis. At this juncture, traders could set their sights on further targets at 6,710, 6,750, and even 6,830.

It's noteworthy to be cautious about the index's movement above the 6,750 threshold, as this level ventures into the overbought zone. Prudent traders might consider this range with particular attention and adjust their strategies accordingly.

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

First Published: Aug 30 2023 | 07:06 AM IST

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