Nifty Pvt Bank, FMCG indices: Here's why you should buy the dips

According to Ravi Nathani, an independent technical analyst, the Nifty FMCG index may trade sideways, while the Nifty PSU Bank index is expected to trade with a positive bias.

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Ravi Nathani Mumbai

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Nifty FMCG Index: A Sideways Stint

The Nifty FMCG Index is currently in focus, and it appears to be gearing up for a spell of sideways consolidation in the near term.

In a sideways market, where prices tend to move within a certain range without a clear upward or downward trend, traders often employ different tactics. One such strategy, and perhaps the best in this situation, is to accumulate assets at lower levels.

Why is this the case? 

Well, if the short-term trend is bullish, it's reasonable to anticipate that, despite the sideways movement, there might be upward spurts from time to time.

So, what are the key levels to watch?

On the downside, potential support levels come in at 51,860, 51,500, and 51,250. These could act as cushions for any downward movements. On the flip side, we have resistance levels at 52,325, 52,665, and 53,180. These are the barriers that traders should be mindful of if prices begin to climb.

In summary, when navigating the Nifty FMCG Index in its current sideways mode, remember that the short-term trend is in your favor. The best course of action, based on this analysis, would be to consider accumulating assets at lower levels, keeping a watchful eye on those support and resistance levels.

Nifty Pvt Bank Index: Buy on dips.

Currently, the Nifty Pvt Bank Index stands at 23,539.15, and the charts paint a bullish picture for both the near and short term. For traders seeking to harness this momentum, a 'buy on dips' strategy appears to be the optimal approach.

Why 'buy on dips'?

Well, it aligns with the current bullish trajectory. When an index is on the upswing, prices often experience intermittent dips or corrections before resuming their ascent. These dips can present valuable entry points for traders looking to capitalize on the upward trend. Support levels play a crucial role in this strategy. Potential support zones are identified at 23,500, 23,315, and 23,025. These levels could act as sturdy foundations should the index experience a pullback.

On the flip side, resistance levels offer insight into where the index might encounter hurdles on its upward journey. For this index, resistance is anticipated around 24,000 and 24,530. These levels could serve as near-term targets for traders riding the bullish wave.

Technical indicators, such as MACD and RSI, are flashing green signals, corroborating the bullish sentiment. Nevertheless, prudence is key in trading. To manage risk effectively, traders are advised to set a strict stop-loss at 22,700 on a closing basis.

In conclusion, the Nifty Pvt Bank Index is currently riding high with a bullish trend. The 'buy on dips' strategy is well-suited to capture potential gains, but it should always be employed judiciously. 

With support and resistance levels in sight and technical indicators in favor of the bulls, traders have a robust framework to navigate this dynamic landscape.

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


First Published: Sep 13 2023 | 07:20 AM IST

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