 "Nifty Energy poised for breakout; FMCG has limited upside: Ravi Nathani")
Nifty Energy index: Poised for a bullish breakout
The Nifty Energy index is on the verge of a significant breakout, having closed near its key resistance level of 38,150. A decisive close above this level would confirm the start of bullish momentum, paving the way for further upside in the near term. Once the breakout occurs, the next resistance levels on the charts are anticipated at 38,950 and 40,000, offering traders clear targets for upward movement.
The technical outlook is further reinforced by the MACD indicator, which signals bullish momentum, suggesting that the index is well-positioned for a rally. As a result, a buy on dips strategy is recommended for traders and investors aiming to capitalise on this potential uptrend.
Key support levels to monitor are at 37,100 and 36,780, where the index is likely to find buying interest if any pullbacks occur. For traders, the best approach would be to accumulate positions near support levels while maintaining a strict stop loss to safeguard against unexpected reversals. Long-term investors may find this an opportune moment to enter the market, given the robust technical setup and the likelihood of sustained bullishness.
In conclusion, the Nifty Energy index is at a critical juncture, with a breakout above 38,150 likely to trigger a strong upward trend. Traders should prepare for this scenario by adopting a buy-on-dips strategy while staying vigilant at the defined support and resistance levels for optimized trading decisions.
Nifty FMCG index: Bullish momentum with limited upside
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The Nifty FMCG index is showing signs of a technical rebound, with indicators such as the RSI and MACD signaling a short-term bullish momentum. This bounce, however, is expected to be capped, making it a potential dead cat bounce—a temporary recovery that may fizzle out in the coming month.
The index has strong support at 56,750, which should serve as a strict stop loss level for traders. Any dips near this level provide a good opportunity to accumulate positions. On the upside, resistance levels are visible at 58,780 and 59,280, with the potential for the index to touch a maximum of 60,000 before momentum weakens.
The best trading strategy in the current scenario is to buy on dips but limit expectations for a prolonged rally. This technical bounce is best suited for short-term traders looking to capitalise on the near-term momentum. Investors and cautious traders should approach this with prudence, as the broader market trend may shift once the current bounce completes.
In summary, while the Nifty FMCG index offers short-term trading opportunities, the upside remains limited due to the nature of the rebound. Traders are advised to follow a disciplined approach, sticking to the defined stop loss and profit targets, and to stay alert for signs of a reversal post the short-term rally. (Ravi Nathani is an independent technical analyst. Views expressed are personal.)