Traders can adopt sell-on-rise strategy on Bank Nifty, says Ravi Nathani

According to the technical analyst, the Bank Nifty is likely to exhibit a negative bias as long as it remains below 42,850.

Nifty

Last close: 17,854.05

The Nifty Index, at present, is exhibiting upward momentum, however, this trend may soon encounter formidable resistance in the form of a range between 18,100 to 18,200.

In the event that the Index is able to successfully negotiate this obstacle and close above the aforementioned range, there is a likelihood of a prolonged upward trajectory towards the levels of 18,450 to 18,700.

Conversely, should the Index breach the support range of 17,600 to 17,475, it may be subjected to further downward pressure and may find solace in the form of support in the vicinity of 17,100 to 16,800.

Given these circumstances, it would be judicious for traders to consider adopting a sell or profit-taking strategy near the resistance levels, with a well-defined stop loss placed at 18,200.

Furthermore, traders should be vigilant in seeking out opportunities to buy the Index at the support levels, with a stop loss placed at 17,475, in order to maximize their potential gains while mitigating potential losses.

No Trade Zone: 17,700 - 18,000  

Expected Weekly Resistance: 18,095 – 18,300 - 18,750

Expected Weekly Support: 17,480 – 17,225 – 16,700

Nifty Bank

Last close: 41,499.70

The Nifty Bank Index is currently displaying a persistent downward trend, as evidenced by the upper trend line that has been established by connecting the peak and close prices observed on December 14, 2022, January 4, 2023, and January 24, 2023.

This trend line serves as a clear indicator of the immediate resistance levels that the Index is likely to face in the near and short term, with the resistance range estimated to be situated between 42,340 and 42,750.

A comprehensive technical analysis of the price action of the Index reveals that, until such a time that the Index is able to breach and sustainably close above the level of 42,850, the high prices will remain indicative of lower tops in the downward trend.

In light of these findings, it would be prudent for traders to adopt a sell-on-rise strategy, considering the current downward trend, until the Index is able to break above the level of 42,850.

No Trade Zone: 40,881 – 42,110    

Expected Weekly Resistance: 42,525 – 43,350 – 44,900

Expected Weekly Support: 40,600 – 39,750 – 38,636  

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