 "Here's how to plan your trades in Nifty IT, Auto indices")
Nifty IT Index
Bias: Range bound on charts
The Nifty IT Index, currently at 38,204, presents a scenario marked by a range-bound pattern on the charts, featuring upper and lower levels at 38,375 and 37,425, respectively.
The key to unlocking potential market direction lies in a decisive close either above or below this established range.
In the absence of a clear breakout, traders are advised to tread cautiously and abstain from active trading within the index. For risk-oriented traders, an alternative strategy involves selling near the upper resistance level of 38,375 and buying near the lower support level of 37,425.
This tactical approach enables traders to capitalize on price oscillations within the range, positioning themselves for potential opportunities as they await a definitive breakout to guide their trading decisions.
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Nifty Auto Index
Bias: Sell on rise
The Nifty Auto Index, standing at 19,433.05, portrays a near-term downtrend on charts, with identified support levels around 18,850. The recommended trading strategy aligns with selling on upward movements, implementing a critical stop loss set above 19,725 on a closing basis.
This strategic approach acknowledges the prevalent bearish sentiment and strategically places traders to benefit from potential downside movements. The inclusion of a stop loss mechanism serves as a risk management tool, ensuring a disciplined exit strategy in the face of unexpected market shifts.
Conclusion: In conclusion, the Nifty IT and Auto Indices present traders with distinct trading scenarios, each demanding a thoughtful approach.
The Nifty IT Index advises patience, suggesting traders stay on the sidelines until a decisive breakout materializes. On the other hand, the Nifty Auto Index signals a bearish trend, urging a strategic selling approach fortified with a defined stop loss for risk management.
Traders are encouraged to remain vigilant, adapt their strategies based on evolving market dynamics, and incorporate disciplined risk management practices to navigate the dynamic conditions of these indices effectively. As the markets unfold, these tactical approaches equip traders to make informed decisions and optimize their outcomes in the ever-changing landscape.
(Ravi Nathani is an independent technical analyst. Views expressed are personal).