Nifty PSU Bank index forms 'lower top, lower bottom' formation on charts

Traders can capitalise by selling the index and its constituents on any intermittent rise

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Ravi Nathani Mumbai

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Nifty PSU BANK Index
The Nifty PSU BANK Index presently rests at 4,528.65, reflecting a near-term downtrend based on observable patterns. Notably, a distinctive lower top and lower bottom formation is evident on the daily charts. In light of this, a prudent risk management strategy involves setting a firm stoploss at 4,625 on a closing basis. For traders, a strategic course of action involves capitalizing on upward movements to sell the index and its constituents.

The specified target price for such trades lies at a minimum of 4,410, followed by 4,336 and 4,280. The Pivot S1 level for the month aligns closely with the anticipated price of around 4,281. Additionally, the 60-day Exponential Moving Average (EMA) also converges around 4,325, further fortifying the identified target range. 

Nifty FMCG Index
The Nifty FMCG Index is currently at 51,815.40, showing a downtrend on the charts. The expected support lies around 50,650, which presents an attractive opportunity for traders. A smart trading strategy involves taking advantage of market downtrends by considering buying during price dips. This strategy aligns with the potential support zone, which also corresponds with the Pivot 2 level. This combination of factors strengthens the reliability of this support area. Additionally, short-term charts indicate a positive outlook, emphasizing the importance of the ongoing correction phase.

Traders, in the near term, are advised to make the most of this situation by buying the index when prices dip. This approach aims to benefit from an expected technical rebound. Looking ahead, resistance levels are projected to be around 53,000. This could pose a challenge for the index in its upward movement. In conclusion, the analysis of the Nifty FMCG Index shows a downtrend, but a support level around 50,650 encourages traders to consider buying during market dips. 

Disclaimer: Ravi Nathani is an independent technical analyst. Views expressed are personal. He doesn't hold any positions in the indices mentioned above and this is not an offer or solicitation for the purchase or sale of any security.

First Published: Aug 17 2023 | 07:16 AM IST

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