Nifty Bank, Nifty Financial Services charts signal downtrend in near-term

According to Ravi Nathani, an independent technical analyst, the Nifty Bank index can slide to 47,000 - 46,200 levels; while the Financial Services Index can dip to 20,800 - 20,600 levels.

Nifty Bank Index

The Nifty Bank Index, currently trading at 47,773.25, is exhibiting a near-term downtrend on the charts. Support levels are anticipated around 47,000 and 46,200, suggesting potential areas where selling pressure could subside temporarily.

Given this scenario, the recommended trading strategy would be to sell on rallies. The indication of a negative trend is further supported by the MACD indicator, which is trending downwards. This adds credence to the bearish outlook for the near term, signaling that downward momentum may persist.

Traders should closely monitor price movements and consider initiating short positions or selling opportunities as the index rallies. However, it's essential to exercise caution and implement risk management strategies, such as setting stop-loss orders, to mitigate potential losses in case of unexpected market movements.

By aligning trading decisions with the prevailing trend and technical indicators, traders can position themselves advantageously to capitalize on potential downward movements in the Nifty Bank Index while managing risk effectively.

Nifty Financial Services Index

The Nifty Financial Services Index, currently trading at 21,146, is experiencing a downward trend on the charts, signaling a bearish outlook for the near term.

In light of this trend, the recommended trading strategy is to sell on rallies. With the index showing weakness on the charts, supported by indicators such as the MACD and RSI, there is a likelihood of continued bearishness and underperformance in the near future.

As such, traders may consider selling on any upward movements in the index. Potential targets for selling positions could be around 20,800 and 20,600, reflecting levels where downward momentum may be expected to intensify.

Additionally, traders may opt to stay away from initiating fresh buying positions until the index shows signs of stabilizing or until support levels mentioned on the charts, such as 20800 and 20600, are reached.

Implementing a sell-on-rise strategy and exercising caution in initiating new positions can help traders navigate the current market conditions effectively, allowing them to capitalize on potential downward movements in the Nifty Financial Services Index while minimizing risks associated with the prevailing bearish trend.

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