 "Ravi Nathani suggests buying dips in Nifty; Nifty Bank seen rangebound")
Nifty outlook: Buy on dips with key levels to watch
Nifty, currently positioned at 24,148.20, indicates potential for a near-term bounce following a sharp correction. This recent dip presents an attractive opportunity for traders to adopt a “buy on dips” strategy, capitalising on potential rebounds. Support levels for this week are expected at 23,950 and 23,880. A decisive close below 23,880, however, could lead the index further down to test support at 23,636 and, if necessary, 23,364. To manage risk, long positions should be exited if the index closes below 23,880, as it would signal additional downward pressure. On the resistance side, key levels to monitor are 24,550, followed by 24,650, and then 24,800. Achieving these levels would signal a continuation of upward momentum, potentially providing short-term gains. The overall outlook for the index remains positive, and a buy-on-dips strategy aligns well with this sentiment. However, it is essential for traders to closely monitor the market dynamics, particularly Foreign InstitutionalInvestor (FII) activity, which often drives significant buying or selling pressure in the market. A shift from FII selling to buying could strengthen the bullish momentum, helping the index approach and possibly exceeding the resistance targets at 24,650 and 24,800 sooner than anticipated. In summary, the recommendation for traders is to look for buying opportunities at support levels, with a strict stop-loss for downside protection. Keeping an eye on daily FII inflows or outflows will add insight, as sustained FII buying would reinforce bullish momentum. This careful approach of buying on dips with a stop-loss safeguard should support traders as they aim to capture the index’s potential bounce while managing downside risks in this volatile environment.
Nifty Bank analysis: Range-bound trading with potential breakout
Nifty Bank, currently at 51,561.20, is oscillating within a range of 1,400 points, specifically between 52,450 on the upper side and 51,050 on the lower. Until the index breaks through either of these levels on a closing basis, it is likely to continue consolidating within this band, experiencing sessions with notable volatility. For risk-tolerant traders, the strategy could involve buying near the lower support level of 51,050 and selling near the upper resistance at 52,450, repeating this approach in line with the index’s oscillations. Conversely, cautious traders may prefer to await a confirmed breakout from this range before committing to trade, as a move beyond either boundary would signal a new directional trend. Should the index break through the upper limit of 52,450, the next resistance levels to monitor are at 52,850, followed by 53,550. Conversely, a close below the lower range of 51,050 could set the stage for further declines, with successive support levels expected at 50,700, 50,450, 50,200, and ultimately 49,600. The 49,600 level, marking an oversold zone, could act as a crucial buy zone, potentially attracting buyers for a quick technical bounce. This support level is especially significant for near-term traders seeking opportunities during sharp corrections. Overall, while the index remains confined within its current range, range-bound strategies will likely dominate the near-term approach. However, a decisive close outside this band is expected to trigger momentum in the direction of the breakout. As always, monitoring key support and resistance levels closely will be essential to navigating the Nifty Bank during this consolidation phase, with attention to any sudden breakout on the horizon.
(Ravi Nathani is an independent technical analyst. Views expressed are personal).