Trading strategies for Nifty Metal, Energy indices

According to Ravi Nathani, an independent technical analyst, one should await for buying opportunities in Nifty Metal, whereas in case of Nifty Energy one can look for opportunites to sell.

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Ravi Nathani Mumbai

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Nifty Metal Index: Awaiting Opportunity Amidst Trends

In the realm of trading, the Nifty Metal Index, currently positioned at 7,046.90, presents an intriguing scenario. It's crucial to dissect the short-term and near-term trends to glean insights into its future trajectory.

Short-term Trend: Bullish

Firstly, the short-term perspective unveils a bullish trend on the charts. This indicates that in the recent past, the index experienced a positive rally. It's the kind of news that excites traders looking for opportunities to go long.

Near-term Trend: A Pullback

However, when we shift our gaze to the near-term outlook, a different picture emerges. The index seems to be in the midst of a pullback phase, following the previous rally. This essentially means that although the short-term trend suggests optimism, the near-term environment may be slightly bearish.

Trading Strategy?

The current phase, marked by the pullback, presents an intriguing buying opportunity. This is especially relevant for those who prefer to accumulate assets when they are trading near support levels. The anticipated support zones for the Nifty Metal Index are approximately at 7,020, 6,955, and 6,910.

As per the best trading strategy, it's advisable to consider buying on dips, but with a critical caveat. Maintain strict stop-loss strategy to safeguard against the unexpected.

In this context, a close below 6,850 should serve as a significant alarm bell. This would signify a trend shift towards the bearish side. In such a scenario, the next support levels to watch would be at 6,780 and 6,650.

In conclusion, the Nifty Metal Index's short-term bullish trend, coupled with the near-term pullback, sets the stage for a strategic accumulation opportunity. Keep a close eye on those support levels, and trade wisely.

Nifty Energy Index: Seize Selling Opportunities in the Short Term

The Nifty Energy Index, currently positioned at 27,420.55, presents an intriguing blend of trends - a bearish short-term outlook coupled with a bullish near-term perspective. Let's break down what this means for traders.

Short-Term Bearishness

In the short term, the index appears to be caught in a bearish grip. This implies that recent movements have been on a downward trajectory. For those looking at quick gains, this can offer potential opportunities.

Near-Term Optimism

However, in the near term, a different story unfolds. The index seems to be gearing up for a more positive phase. This means that while the short-term picture suggests caution, the near-term view paints a more optimistic scenario.

Strategic Approach: Selling on Rises

Given the bearish sentiment in the short term, a strategic stance would be selling on rises or near key resistance levels. These resistance levels are expected to emerge around 27,580, 27,736, and 27,830. To prudently manage risk, it's recommended to implement stop-loss orders.

In this context, a sensible stop-loss level would be positioned just above 27,950. Summing Up The Nifty Energy Index's current landscape, marked by a bearish short-term trend and a bullish near-term outlook, suggests a tactful trading approach. Capitalizing on selling opportunities, particularly around the aforementioned resistance levels, aligns with the prevailing market conditions.

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


First Published: Sep 15 2023 | 07:27 AM IST

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