Ravi Nathani suggests strategy on Nifty50 & Nifty Bank ahead of RBI policy

The Nifty 50 index has closed near a significant resistance level of 24,540, while the Nifty Bank index is at a pivotal juncture

Nifty 50 index: At a critical crossroad

The Nifty 50 index has closed near a significant resistance level of 24,540, marking a pivotal point in its momentum. A closing above 24,550 would confirm a shift in trend from bearish to bullish, paving the way for a stronger upward trajectory. Conversely, a failure to sustain above this level may result in prolonged consolidation, likely within the range of 24,550 to 23,850, until a decisive breakout occurs. 

 

For traders and investors, this phase requires strategic planning. The best trading strategy would be to initiate fresh long positions only if the index closes above 24,550. In such a scenario, the next resistances to monitor are at 24,775, 25,125, and 25,625, which could act as profit-booking levels. On the downside, if the index fails to breach the resistance, the consolidation phase within the defined range will likely persist. 

 

Support levels near 23,850 will become critical for short-term traders, presenting buying opportunities near the lower end of the range. Technical indicators align with this cautious optimism, hinting at the possibility of a breakout. However, traders should remain disciplined, adhering to stop loss levels based on the range boundaries, to navigate potential volatility effectively. 

 

In summary, the Nifty 50 index is at a decisive juncture. A breakout above 24,550 on a closing basis would signal bullish momentum, offering lucrative opportunities for traders, while a failure to do so calls for patience and range-bound trading strategies.

 

Nifty Bank index: Awaiting directional clarity amid RBI policy

The Nifty Bank index is at a pivotal juncture, with the upcoming RBI Monetary Policy announcement expected to dictate its short-term momentum. A trade above 52,800 is likely to trigger positive momentum, opening up resistance levels at 53,475 and 53,950, signaling potential bullish activity. 

 

However, any failure to sustain above this level may keep the index range-bound or lead to a correction. On the downside, a close below 52,000 would indicate a shift toward bearish sentiment, with key support levels identified at 51,600, 51,250, and 50,800. These levels will serve as crucial benchmarks for traders to plan their strategies. 

 

Given the high-impact event of the RBI policy, traders are advised to exercise caution and closely monitor these resistance and support levels. A breakout above 52,800 would warrant fresh long positions targeting the next resistance zones, while a breach below 52,000 would call for defensive action, such as exiting long positions or initiating short trades with targets near the support levels. Technical indicators show mixed signals, reflecting the cautious sentiment ahead of the policy announcement. 

 

Hence, the best trading strategy would be to remain flexible and plan trades based on clear breakouts or breakdowns of the marked levels. In summary, the Nifty Bank index is poised for a directional move, with 52,800 and 52,000 being the critical levels to watch. 

 

The RBI policy outcome will likely act as the catalyst for the next major trend, and traders should align their strategies accordingly.

 

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