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Nifty Metal, Nifty Pharma: 'Sell on rise' as charts suggest likely pullback

Technical indicators such as RSI and Stochastic are currently situated in the overbought zone for the Nifty Pharma index, said Ravi Nathani

technicals

technicals

Ravi Nathani Mumbai

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Nifty Metal Index looks bearish for near-term
The current market scenario for the Nifty Metal Index reveals a bearish trend in the near term, as depicted by the charts. To navigate this trend effectively, traders are advised to implement a strict stop loss at 6,880.

The optimal trading strategy for both the index and its constituents involves selling on upward movements or initiating trades below the critical level of 6,765. This approach aims to capitalize on potential downward movements in the market.

A minimum target expectation has been set at 6,700, providing traders with a clear goal for their selling positions. For additional insights, traders should be watchful during the correction phase.

If the index approaches the 6,600 level, swing traders may find opportunities to participate in the market for a quick bounce and potential gains.

This strategy allows traders to adapt to market conditions, making informed decisions based on potential rebounds while prudently managing risks associated with the prevailing bearish trend in the Nifty Metal Index.

By aligning their actions with these market dynamics, traders can enhance their ability to navigate the complexities of the current trend and optimize their trading outcomes.

Nifty Pharma Index: Book profits on upmove

The Nifty Pharma Index has experienced a significant upward rally since the lows observed in October 2023, leading to new highs in the trend. This remarkable rally serves as a clear indication of the bullish trend dominating the market.

However, technical indicators such as RSI and Stochastic are currently situated in the overbought zone. This suggests that selling pressure is likely to be exerted on upward movements, signaling a potential pullback in the market.

Given the prevailing conditions, the recommended trading strategy for traders interested in this index is to sell on upward movements. This approach aligns with the anticipation of a pullback in the market.

Traders should be prepared to capitalize on selling opportunities as the index rises, considering the potential impact of the overbought conditions signaled by RSI and Stochastic.

In terms of support levels on the charts, traders should closely monitor key levels around 15,800, 15,550, and 15,350. These levels are expected to act as support during the potential pullback, and traders can strategically plan their trades around these critical price points.

In summary, while the overall trend for the Nifty Pharma Index remains bullish, the current overbought conditions indicate the likelihood of a pullback.

Traders are advised to adopt a sell-on-rise strategy, taking advantage of potential selling opportunities and strategically navigating the market dynamics for optimal trading outcomes.

Disclaimer: Ravi Nathani is an independent technical analyst and 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: Nov 23 2023 | 8:06 AM IST

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