Nifty FMCG, PSU Bank indices: Near-term trading strategies

According to Ravi Nathani, an independent technical analyst, the Nifty FMCG index seems range-bound, while one can adopt a 'sell on rise' strategy for the PSU Bank index.

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Ravi Nathani Mumbai

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Nifty FMCG Index: Navigating a Range-Bound Market

The Nifty FMCG Index, currently trading at 51,672.65, finds itself in a range-bound situation, with clear boundaries between 52,520 on the upper side and 50,980 on the lower side. This analysis sheds light on the dynamics of this range-bound market and suggests trading strategies for investors to consider.

As long as the index remains within this defined range and does not breach either boundary, it's prudent to employ a range trading strategy. In such a scenario, the optimal approach is to buy when the index nears the lower range and sell when it approaches the upper range. This strategy leverages the predictable price movements within the established range and aims to capitalize on these fluctuations.

However, it's important to be vigilant and ready to adapt to market conditions should a breakout occur. A close above the upper boundary or below the lower boundary could serve as a trigger for a directional move in the market. Traders should closely monitor these levels for potential shifts in market sentiment.

In the event of a violation of the lower range, the next support levels on the charts are anticipated to be around 50,525 and 49,965. Conversely, if the index breaks above the upper range, the subsequent resistance levels would likely be around 52,736 and 53,150.

In conclusion, the Nifty FMCG Index is currently range-bound between 52,520 and 50,980. A range trading strategy is recommended, involving buying near the lower boundary and selling near the upper boundary. However, vigilance is key, as a breakout could signal a change in market direction. Keep a close eye on support and resistance levels for potential trading opportunities and risk management.

Nifty PSU Bank Index: Navigating Near-Term Weakness

The Nifty PSU Bank Index, currently trading at 5,038.25, is exhibiting signs of weakness on the charts for the near term. This analysis provides insights into the prevailing market conditions and suggests trading strategies for both traders and investors to consider.

In the near term, the index appears to be on a weak footing, making 'sell on rise' a prudent trading strategy. This approach entails selling when the index experiences upward price movements.

Given the current bearish sentiment, this strategy aligns with short-term market dynamics. For traders looking to capitalize on potential downward movements, it's essential to identify key support levels on the charts. These support levels are expected to materialize around 4,970, 4,870, and 4,770. These levels can serve as price targets for traders employing the 'sell on rise' strategy.

However, it's crucial to note that the index is nearing an oversold condition. This oversold zone is anticipated to fall within the range of 4,630 to 4,545. For opportunistic and swing traders, this range presents an attractive opportunity to consider buying. When an asset enters an oversold zone, it often suggests that selling pressure has been excessive, and a rebound may be on the horizon.

In summary, the near-term trend for the Nifty PSU Banks Index is currently bearish, making 'sell on rise' a viable trading strategy with defined support levels as targets. Meanwhile, investors and swing traders should keep a close watch on the expected oversold zone, as it could offer favorable entry points for long positions.

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

First Published: Sep 22 2023 | 06:25 AM IST

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