Chart Analysis: Nifty Bank in bearish mood, presents buying opportunities

Bank Nifty Index

The Bank Nifty Index, currently standing at 48,285.35, has experienced a recent sharp correction, bringing it close to a crucial support level at 48,200. Should the index breach this support, the next significant level to monitor would be 48,000, which also aligns with the S4 Level on Pivot points. 

Despite the near-term bearish trend observed on charts, the correction presents an opportunity for traders to consider buying the index and its constituents on dips. The targeted resistance levels to watch for potential bullish movements are 48,500, 48,800, 49,000, and 49,400. 

It's essential for traders to set a strict stop-loss order below the 48,000 level on a closing basis to manage risks effectively and mitigate potential losses. This precautionary measure can help traders limit their downside exposure while seeking opportunities for potential upside gains. 

In summary, with the index nearing crucial support levels and displaying signs of potential bullish movements, traders may consider buying on dips with a disciplined risk management approach, targeting specific resistance levels while closely monitoring price action for breakout or breakdown signals.

Nifty Private Bank Index

The Nifty Private Bank Index, currently at 24,044.30, is approaching a significant support level around 23,875. This level presents an opportune moment for traders to consider buying the index, especially given the recent sharp correction in the near term. 

The best trading strategy for traders in this scenario would be to wait for the correction to complete and look for opportunities to buy the index on dips or near the support level of 23,875. By doing so, traders can capitalise on the potential rebound from this key support level. With the index expected to find strong support around 23,875, traders can set their targets for potential upside movements. 

Targets for bullish trades could be set at 24,200, 24,400, and 24,525, aiming to capture potential gains as the index rebounds from the support level. It's important for traders to exercise caution and adhere to risk management principles while implementing this strategy. 

Setting a stop-loss order below the support level can help mitigate potential losses in case the market moves against their positions. In summary, buying the Nifty Private Bank Index on dips or near the support level of 23,875 with appropriate risk management measures in place could offer traders a favorable opportunity to profit from potential upside movements in the index.

Disclaimer: Ravi Nathani is an independent technical analyst. Views are his own. 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. It should not be construed as a recommendation to purchase or sell such securities.