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Nifty PSU Bank, Financial Services Indices may exert downward pressure

According to Ravi Nathani, an independent technical analyst, Nifty Financial Servies Index can be short with a stop at 20,800, while selling pivot for the PSU Bank index stands at 7,136.

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Ravi Nathani Mumbai

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Nifty Financial Services Index
Last close: 20,620

The Nifty Financial Services Index, currently at a CMP (Current Market Price) of 20619.70, is currently displaying a downward trend in the near term according to chart analysis.

The selling trigger is anticipated once the index breaks the key level of 20,550. Subsequent support levels are expected around 20,425 and 20,225, and traders are advised to closely monitor these levels for potential downward movements. 

To manage risks effectively, traders adopting a sell-on-rise strategy are recommended to implement a strict stop-loss at 20,800 on a closing basis. This precautionary measure aims to mitigate potential losses in case of adverse market movements.

On the contrary, if the index manages to break above the resistance at 20,800, the next levels to watch are 20,936 and 21,136. These levels become important indicators for potential bullish movements and should be considered by traders when evaluating their trading positions.

In summary, the Nifty Financial Services Index suggests a near-term downward trend. Traders employing a sell-on-rise strategy should keep a close eye on the critical levels of 20,550, 20,425, and 20,225. A strict stop-loss at 20,800 is advised to manage risks.

Conversely, a break above 20800 may signal potential resistance levels at 20,936 and 21,136, providing valuable insights for traders in adapting their positions accordingly.

Nifty PSU Banks Index
Last close: 7,041

The Nifty PSU Banks Index, currently trading at a CMP (Current Market Price) of 7040.65, indicates a near-term downward trend according to chart analysis. To manage potential risks, traders are advised to implement a strict stop-loss between the range of 7,110 and 7,136.

A close above 7,136 could signal a potential reversal, with the next resistance levels identified at 7,190 and 7,295.

Conversely, if the index breaks the 7,010 level, the next support on charts is expected at 6,950, followed by 6,850. These support levels are critical for traders to monitor as they may act as potential zones for rebounds or extended downward movements.

Technical indicators like MACD and RSI are both signaling a downtrend. In light of this, the recommended trading strategy is to sell on rises. This approach aligns with the prevailing bearish sentiment reflected in the technical indicators and the identified levels on the charts.

In summary, the Nifty PSU Banks Index indicates a near-term downward trend. Traders should consider implementing a strict stop-loss between 7,110 and 7,136, and closely monitor the levels of 7136, 7010, 6950, and 6850. The sell-on-rise strategy is suggested based on the bearish signals from MACD and RSI, providing traders with a strategic approach to navigate the current market conditions.

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

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First Published: Feb 27 2024 | 6:39 AM IST

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