Charts reveal bearish trend for Nifty Private Bank index in near-term

By maintaining a strict stop-loss limit and implementing a sell-on-rise approach, investors can navigate present market trends with ease and mitigate potential losses, said the technical analyst

Nifty Financial Service
Last close: 19,311.45

Upon analysis of hourly charts, it reveals that a sell-on-rise approach would be most suitable, given the current scenario. This recommendation is predicated upon  careful observation of key technical indicators, such as the Relative Strength Index (RSI) and Stochastic, both of which are exhibiting an ominous downward trend.

The underlying pattern is evident on the charts, which further corroborates this analytical view, highlighting a conspicuous trend of lower tops and lower bottoms.

In light of these findings, it is recommended to adopt a cautious approach with a stringent stop-loss of 19,375 and set the sell-on-rise strategy with the target range lying between 19,175 and 18,850.

It is worth noting that the Stochastic indicator is presently falling below the 80 mark, underscoring a discernible decline in the market's momentum.

Additionally, the RSI, which gauges the strength of the underlying asset, is also exhibiting a pronounced downtrend, underscoring a declining appetite for risk in the financial services sector.

In summation, given the present market conditions, it is recommended that investors pursue a prudent approach while trading Nifty Financial Services index.

In light of the analysis presented above, it is advised to adopt a sell-on-rise strategy, while maintaining a strict stop-loss limit to ensure minimal losses.

Nifty Private Bank
Last close: 21,843.3
 

Chart analysis reveals that a sell-on-rise approach would be most appropriate, with a strict stop-loss limit of 22,150. It is worth noting that the technical indicators, including the Stochastic, RSI, and MACD, have exhibited clear signs of an impending correction in the near term.

These findings are corroborated by the index's hourly charts, which illustrate a prominent lower top and lower bottom pattern, indicative of an underperforming market trend.

Although the possibility of the index breaching the 22,150 level cannot be entirely discounted, it is expected to be challenging.

However, in the event of a trade and close above this level, it would open doors for the index to potentially reach levels of 22,500, 23,200, and 24,200.Nevertheless, such a scenario remains unlikely given the present market trends.

In light of the above analysis, it is recommended to adopt a sell-on-rise strategy, with a strict stop-loss limit of 22,150.

While it may take up to ten days to realise the target of 22,150, this approach will enable investors to minimise potential losses while capitalising on any minor price fluctuations.

In conclusion, investors are advised to exercise caution and trade with a clear understanding of the risks involved in the current market scenario.

By maintaining a strict stop-loss limit and implementing a sell-on-rise approach, investors can navigate the present market trends with greater ease and mitigate potential losses.

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