Nifty Auto bearish in near-term, Energy rangebound; check trading strategy

Nifty Energy Index Analysis:

The Nifty Energy Index is currently trading at 40,753.95. In the near term, the index appears to be range-bound, with a defined range between 41,460 and 40,400. A close above or below these levels would likely trigger movement in the respective direction. 

Until the index breaks out of this range, the best trading strategy would be to wait for a decisive breakout. However, for risk-tolerant traders, an alternative approach could be to buy near the lower support level of the range and sell near the higher resistance level. 

If the index breaks above 41,460, the next resistance levels on the charts would be 41,900 and 42,300. Conversely, if the index breaks below 40,400, the next support levels are anticipated to be 40,000, 39,800, and 39,200. 

In summary, traders should monitor the range-bound movement closely and look for opportunities to trade within the range or wait for a breakout to take positions in the direction of the trend. 

Risky traders may consider buying near the lower support and selling near the upper resistance, while more conservative traders should wait for a breakout above 41,460 or below 40,400 to take action.

Nifty Auto Index Analysis:

The Nifty Auto Index is currently trading at 25,267.85. The near-term trend for this index appears to be downward on the charts, with strong support expected around the 24,500 level. Given this bearish outlook, the best trading strategy would be to sell on rises. 

Technical indicators such as Stochastic and RSI are pointing towards underperformance in both the near and short term, suggesting that a pullback is expected. Traders should consider waiting for this correction to complete before making any fresh investments in the index or its constituents. 

Selling on rises can help traders capitalise on the expected downward movement while managing risk. The strategy involves monitoring the index for any temporary upward movements and using these as opportunities to initiate short positions. 

In summary, the current bearish trend and technical indicators suggest that traders should adopt a sell-on-rise strategy for the Nifty Auto Index. This approach will allow traders to take advantage of the expected correction, with the key support level to watch being 24,500. Once the correction is complete, it will be a better time to consider new investments in the index and its constituents.

(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.)