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

According to the technical analyst, the Nifty Pharma index is likely to get support around 11,981 level.

Nifty Pharma

Last close: 12,308.45

The Nifty Pharma Index is presently displaying a downward trajectory as indicated by the trend line delineating the nadir of the lowest close on the 18th March 2021 and the trough on the 17th June 2022. This trend line constitutes a substantial degree of support at the 11,981 juncture.

Nonetheless, technical markers such as the Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), and moving averages are still manifesting a bearish disposition, suggesting that the current downward trend of the index is likely to persist in the proximate future.

Given the sharp decline witnessed in the near term, it is postulated that the termination of this correction and a bottom could be expected to occur within a 200-point range, namely 12,180 to 11,980.

This 200-point range represents a window of opportunity for swing traders to opportunistically accumulate the Pharma Index and its constituent elements in anticipation of a short-term pullback.

Consequently, a judicious strategy for traders and investors would be to adopt a wait-and-see approach and bide their time until the correction has run its course before making any investment decisions.

This involves monitoring the index until it stabilizes or the downward trend reverses, signifying a propitious time to purchase. By doing so, traders and investors can reduce their exposure to potential losses and increase their chances of securing gains in the long term.

No Trade Zone: 12,336 – 12,275

Expected Intraday Resistance: 12,370 – 12,449 – 12,550

Expected Intraday Support: 12,236 – 12,160 – 12,049

Nifty Media

Last close: 1,856.50

The Nifty Media Index has displayed a pronounced correction of more than 15 per cent on a daily basis, as exemplified by the characteristic of a lower top, lower bottom formation on the charts.

Technical oscillators such as the Stochastic Oscillator, William %R, and Corner's Relative Strength Index (RSI) are demonstrating an oversold condition, which portends that the correction may be approaching its nadir.

Additionally, the Parabolic Stop and Reversal (PSAR) system has commenced displaying bullish signals at lower levels, adding credence to the argument that the bottom of the correction is near.

In light of these well-read and comprehended technical indicators, it is advised that traders and investors consider adopting an accumulation strategy at the lower levels in order to optimize their trading outcomes.

No Trade Zone: 1,849 – 1,865

Expected Intraday Resistance: 1,880 – 1,895 – 1,925

Expected Intraday Support: 1,836 – 1,818 – 1,780

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