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Nifty50, Mid Select Index bullish on charts in near term; key details here

The Nifty Mid Select Index, currently at 11,336.85, displays a bullish trend on the charts. However, it is approaching a stiff resistance level around 11,450

Markets, bulls, bears, stocks, trading, technicals, market technical, technical analysis
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Ravi Nathani Mumbai

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Nifty 50 Index

The Nifty 50 Index, currently at 22,502.00, exhibits promising signs of strength as indicated by technical indicators such as MACD and RSI. In the near term, the best trading strategy for traders is to buy the index on dips. This approach is bolstered by the positive momentum seen in the technical charts. Key resistance levels to monitor are 22,685, 22,800, and 23,050.

These levels represent potential price targets where traders might consider booking profits. However, it's crucial to maintain a strict stop loss at 22,280 on a closing basis to manage downside risk effectively. 

This stop loss level ensures that any adverse price movements are contained, protecting the trading capital from significant losses. The bullish signals from MACD and RSI suggest that the index is likely to continue its upward trajectory, making buy-on-dips a strategic move. 

In summary, with the Nifty 50 Index showing robust technical indicators, traders are advised to capitalise on dips for entry points. 

Maintaining discipline with a strict stop loss at 22,280 and aiming for the resistance levels of 22,685, 22,800, and 23,050 can maximise potential gains while mitigating risks. This strategy aligns with the current bullish outlook on the charts.

Nifty Mid Select Index

The Nifty Mid Select Index, currently at 11,336.85, displays a bullish trend on the charts. However, it is approaching a stiff resistance level around 11,450, indicating that the index is nearing a potential turning point. 

Given this proximity to resistance, the best trading strategy for the near term would be to wait for the index to approach this resistance level and then book profits. This approach minimises the risk of holding through a potential pullback from resistance. 

Technical indicators such as RSI and Bollinger Bands are signalling that the index is entering an overbought zone, reinforcing the caution to book profits on any rise. The RSI's position suggests that the upward momentum may be waning, and the Bollinger Bands indicate that the price is stretched, both pointing towards a potential consolidation or correction phase. 

In summary, while the Nifty Mid Select Index shows bullish tendencies, the close proximity to the 11,450 resistance level and overbought signals from RSI and Bollinger Bands suggest a prudent approach. 

Traders should consider booking profits on any rise, capitalising on the current levels before a possible pullback occurs. This strategy aligns with the technical indicators and helps in preserving gains.

(Disclaimer: Ravi Nathani is an independent technical analyst. Views are his own. 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: May 21 2024 | 6:40 AM IST

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