Ravi Nathani suggests 'Buy on dips' for Nifty Bank, Financial Services

The Nifty Bank index is on the brink of a potential breakout, with stiff resistance at 52,580, while, the Nifty Financial Services index is currently exhibiting a bullish trend

Nifty Bank index: Poised for a breakout, buy on dips

The Nifty Bank index is on the brink of a potential breakout, with stiff resistance at 52,580. A decisive close above this critical level could signal fresh bullish momentum, paving the way for the index to outperform in the near and short term. 

 

Should the breakout materialise, the next resistance levels are projected at 53,000 and 53,275, offering attractive targets for traders. The technical indicators bolster this positive outlook. The RSI (Relative Strength Index) has already signaled a breakout, reinforcing the likelihood of bullish momentum. 

 

Additionally, monthly options data highlights 53,000 as the level with the highest open interest, further validating the probability of upward movement. This convergence of technical and derivative data strengthens the case for a bullish stance. 

 

For traders, the optimal strategy is to buy on dips, with a strict stop loss placed at 51,780 to manage downside risk. The current setup suggests that any corrections are likely to be short-lived, providing opportunities to accumulate positions at favourable levels. 

 

In summary, the Nifty Bank index appears poised for a breakout, with 52,580 being the critical level to watch. A move above this resistance could unlock further upside, making the index a strong candidate for outperforming other benchmarks. Keep an eye on key levels, adhere to disciplined risk management, and ride the expected bullish momentum.

 

Nifty Financial Services index: Bullish momentum signals buying opportunities

The Nifty Financial Services index is currently exhibiting a bullish trend, supported by strong technical indicators such as the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI). 

 

These indicators suggest sustained upward momentum, providing traders and investors with an opportunity to capitalise on dips. The index's immediate resistance levels are projected at 24,225, 24,380, and 24,700, which could act as profit-booking zones in the near term. On the downside, key support levels are identified at 23,875 and 23,725, offering optimal entry points for accumulation. 

 

The MACD has shown a bullish crossover, signalling an impending price rally, while the RSI remains in a positive zone, indicating sufficient room for the index to rise further without entering overbought territory. This setup underscores the potential for a steady recovery and growth in the short term. 

 

Traders should adopt a buy on dips strategy, purchasing within the support range and setting a strict stop loss at 23,700 to safeguard against unforeseen market reversals. Targets for the current bullish phase are 24,225, 24,380, and eventually 24,700. Investors should monitor these levels closely for profit-booking opportunities while maintaining vigilance over macroeconomic factors that could influence market sentiment. 

 

In summary, the Nifty Financial Services index offers a compelling case for accumulation as it trends upward. By leveraging technical insights and adhering to a disciplined trading approach, market participants can maximise potential returns. The current environment favours long positions, with the index likely to outperform in the near term.  (Ravi Nathani is an independent technical analyst. Views expressed are personal.)