Nifty Bank, Nifty Pvt Bank: Guide to trade in these banking indices

According to Ravi Nathani, an independent technical analyst, the Nifty Bank seems to be trapped in 47,625-47,375 trading range.

Nifty Bank Index

The Nifty Bank Index, currently trading at 47,545.45, appears to be range-bound with levels set between 47,625 and 47,375. A breach above or below this range could signal a directional move for traders.

Should the index close below the lower bound at 47375, it may suggest a bearish sentiment, with potential support levels at 47,000, 46,875, and 46,625. Conversely, a close above 47,625 could indicate bullish momentum, with resistance anticipated at 48,000.

Given the bearish signal from the Moving Average Convergence Divergence (MACD) indicator on hourly charts, along with the stochastic indicator, selling pressure may increase on rallies.

Therefore, if the index breaks below the lower range of 47,375, short selling could be considered as a viable strategy. Traders should remain attentive to price action and monitor for a confirmed breakout or breakdown, aligning their trading decisions with the prevailing market sentiment and technical signals to manage risks effectively.

Nifty Private Bank Index

The Nifty Private Bank Index, currently trading at 23,782.25, is showing a bullish trend in the near term. However, traders should be cautious as stiff resistance is anticipated around the 24,100 level. At this level, traders are advised to look for opportunities to book profits and transition to a cash position for the near term.

Following a potential resistance encounter at 24,100, the index and its constituents may experience a pullback. In such a scenario, support levels on the charts are expected to be found at 23,525, 23,125, and 23,000.

The recommended trading strategy would be to wait for the price to approach the upper resistance level of 24,100. Upon reaching this level, traders can consider booking profits.

Subsequently, during the anticipated pullback, traders can monitor the support levels and initiate buying positions as the index approaches these levels. By adhering to this strategy, traders can capitalize on potential profit-taking opportunities at resistance levels while also strategically positioning themselves to benefit from the subsequent pullback and buying opportunities near support levels.

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