Tech view: Nifty Midcap 50 Index likely to exhibit range-bound trade

According to Ravi Nathani, an independent technical analyst, the Nifty Midcap 50 Index may consolidate in a range of 8,800 - 8,736.

Ravi Nathani Mumbai
Nifty50, nifty
Web Exclusive

Listen to This Article

Nifty Energy Index
Bias: Buy on dips

The Nifty Energy Index's current market price (CMP) is 23,185.25, and its near-term trend is observed to be bullish based on chart analysis, indicating an expected upward trend in the short term.
To take advantage of this trend, traders can implement the buy-on-dips strategy, which involves buying stocks at a lower market price and selling them when the price increases.

The strategy's target is expected to be at 23,750 and 24,000. However, to minimize risks associated with this trading strategy, it is recommended to deploy a stop-loss mechanism. The stop-loss order ensures that stocks are sold when the market price falls below a certain level, thus limiting potential losses.
For the current trading strategy, the stop-loss should be deployed below 22,900. If the Nifty Energy Index trades below the stop-loss level of 22,900, the next support levels on the charts could be expected around 22,525 and 22,100.

Also Read

Look to accumulate pharma, media shares near support levels: Ravi Nathani

Nifty trading range has narrowed down, says Ravi Nathani

Ravi Nathani recommends placing bearish trading bets on Nifty Metal index

Pharma, Energy, Commodities indices look bearish on charts: Ravi Nathani

Bias for Nifty has turned bullish, look to buy on dips: Ravi Nathani

Losing favour: IT sector weighting in Nifty50 at 5-year low of 12.2%

National Stock Exchange issues framework for appointing forensic auditor

Sebi bars ex-Care Ratings MD & CEO Rajesh Mokashi for two years

Emkay Global gets in-principal approval for MF foray, stock jumps 20%

First Bharat Bond ETF matures, delivers 6.5% annualised returns

To summarize, the Nifty Energy Index shows a bullish trend in the short term, and traders can use the buy-on-dips strategy to take advantage of it, with a target of 23,750 and 24,000. However, to mitigate risks, a stop-loss mechanism should be deployed below 22,900. If the index trades below this level, the next support levels could be expected around 22,525 and 22,100.
Nifty MID-CAP 50 Index
Bias: Range-bound
With a current market price (CMP) of 8,762.90, the Nifty MID-CAP 50 Index is anticipated to trade within a specific price range for a period after a sharp rally on the charts, suggesting a range-bound manner.

Trading above or below the expected range of 8,800 - 8,736 could potentially trigger a movement in the direction of the breakout, which refers to a sudden increase or decrease in the market price signaling a potential trend change.
Should the index trade above the expected range, it is expected to face selling interest at the next resistance level on the charts around 8,935 - 9,150, preventing further appreciation.

Conversely, if the lower end of the expected range of 8,736 is broken, the index is predicted to find buying interest at the next support levels on the charts around 8,575 - 8,500 - 8,425, preventing further decline.
To optimize trading in the current market scenario, the best strategy for traders would be to wait for a breakout and post-violation before initiating the trade in the breakout direction, allowing for a sudden increase or decrease in the market price to signal a potential trend change.

In summary, the Nifty MID-CAP 50 Index is expected to maintain a range-bound manner in the near term, providing traders with the opportunity to take advantage of this scenario by waiting for a breakout and then initiating the trade in the direction of the breakout.
(Ravi Nathani is an independent technical analyst. Views expressed are personal).


First Published: Apr 21 2023 | 7:19 AM IST

Explore News