Nifty Auto signals downward trend on charts: Check key levels here

Nifty IT Index

The Nifty IT Index, currently priced at 33,335.15, has undergone a significant correction recently and is now consolidating within a range on hourly charts. This range is delineated by the levels of 33,525 on the upper side and 32,675 on the lower side. 

A close above or below this range would signal a potential directional move for the index. Given the current range-bound movement and the absence of a clear breakout on the charts, the best trading strategy would be to adopt a range-trading approach. Traders can consider buying near the support level of 32,675 and selling near the resistance level of 33,525. 

This strategy allows traders to capitalise on the oscillations within the range until a decisive breakout occurs. In the event of a breakout above the upper range at 33,525, traders can anticipate further resistance levels at 34,300, 34,800, and 35,000. Conversely, if the index breaks below the lower range at 32,675, support levels are expected around 32,500, 31,800, and 31,500. 

Traders should remain vigilant and monitor price action closely for any signs of a breakout or breakdown from the current range. Implementing appropriate stop-loss orders and adhering to risk management principles are crucial to mitigate potential losses and capitalise on trading opportunities within the range. 

In summary, buying near the support level and selling near the resistance level within the current range of the Nifty IT Index presents a prudent trading strategy until a clear breakout is observed on the charts.

Nifty Auto Index

The Nifty Auto Index, currently priced at 22,458.65, is exhibiting a downward trend in the near term as per the charts. In light of this trend, the most prudent trading strategy would be to initiate selling positions on the index and its constituents either on rallies or near the resistance levels. 

The key resistance levels to watch for are at 22,525 and 22,675. Traders can consider selling the index when it approaches these resistance levels. It's important to place a stop-loss order at 22,775 on a closing basis to manage risk effectively in case the trade moves against expectations. 

As for the targets, traders can aim for levels around 21900 and 21,800, which align with the downward momentum indicated by the charts. These levels can serve as potential areas for profit-taking or to exit the short positions. 

By adhering to this trading strategy, traders can capitalise on the prevailing downward trend in the Nifty Auto Index and potentially benefit from price declines in the near term. 

As always, it's essential to monitor the price action closely and adjust the strategy based on evolving market conditions.

(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.)