Rally in Nifty PSU Bank index might lose stream as it nears resistance zone

Only when the index manages to close 4,680 level, it could signify a breakout on the charts, potentially opening the door to further gains

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Ravi Nathani Mumbai

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Nifty Private Banks Index
The Nifty Private Banks Index is currently placed at 23,205.05, and it appears to be in a range-bound phase on the charts. This means it's oscillating between 22,850 and 23,350, and any significant move above or below these levels could trigger a directional shift.

If the index successfully breaches the upper range at 23,350, the next resistance levels to watch out for are around 23,480 and 23,680. On the other hand, if it closes below the lower range of 22,850, then the next support levels could come into play around 22,675 and 22,475.

Given this range-bound scenario, the wisest trading strategy right now would be to exercise patience and wait for a clear breakout. Traders and investors should remain vigilant for a decisive move that takes the index either above 23,350 or below 22,850. This breakout, when it happens, can serve as a strong signal for strategic trading decisions.

Nifty PSU Bank Index
The Nifty PSU Bank Index is currently positioned at 4,651.35, and a close look at the charts reveals some significant levels that traders should keep in mind. Firstly, there's a formidable resistance barrier anticipated around the 4,680-mark. If the index manages to close above this level, it could signify a breakout on the charts, potentially opening the door to further gains. In such a scenario, traders should be prepared to encounter the next resistance levels at 4,736 and 4,825.

However, as long as the index doesn't close below 4,564, the strategy for the near term should lean towards buying on dips. A close below 4,564, though, might invite some selling pressure. In this case, the index could find intermediate support in the range of 4,490 to 4,475. A subsequent close below this range could lead to a more pronounced selloff, with direct support zones expected around 4,400 and 4,325.

For those holding bullish positions, it's vital to closely monitor the 4,490 to 4,475 range. Until this range is breached, the near-term trend for PSU Banks remains bullish, making buying on dips the preferred trading strategy. 

Disclaimer: Ravi Nathani is an independent technical analyst. Views expressed are personal. 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.

First Published: Sep 05 2023 | 07:53 AM IST

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