Short-term trend remains bullish for Nifty; resistance likely around 18,500

According to Ravi Nathani, an independent technical analyst, one can look to 'Book Profits on rise' as the Nifty 50 index is expected to face resistance in the 18,450 - 18,500 range.

Nifty 50 Index

View: Book Profits on the rise

Stop Loss: 18,500

The Nifty 50 Index is currently trading at 18,314.80, and the short-term trend is still intact, which is bullish on the charts. However, in the near term, the index might face stiff resistance between 18,450 - 18,500. Around these levels, we might see a halt in the current uptrend in the near term.

The technical analysis of the index suggests that traders should sell on the rise with a strict stop loss of this resistance level, which is placed at 18,500, as a close above this level might indicate a possible continuation of the uptrend. The recommended target for this sell trade would be 18,200 and 18,150.

In terms of technical indicators, the Relative Strength Index (RSI) is currently placed at 69, with a negative divergence which indicates that the index is on a sell-on rise. The Moving Average Convergence Divergence (MACD) is also trading with a negative divergence at the top resulting in an underperformance that shall be expected in the near term.

The support levels for the index are expected to be between 18,100 - 18,050 and 17,900 - 17,850, respectively. A close below these support levels might lead to a possible continuation of the downtrend.

In summary, the Nifty 50 Index is currently in a short-term uptrend, but traders need to be cautious around the resistance levels of 18,450 - 18,500. It is recommended to sell on the rise with a strict stop loss of this resistance level and a target of 18,200 and 18,150. The support levels are expected to be between 18,100 - 18,050 and 17,900 - 17,850, respectively.

Nifty Bank Index

View: Book Profits on Rise

The Nifty Bank is currently trading at 43,793.55. Based on the analysis of the daily chart, the trend for the near term is likely to be bearish. Strong technical indicators such as RSI, Stochastic, and MACD display negative divergence, indicating that the index is expected to underperform soon.

If the index breaches the 42,650 mark, the stop loss for bulls will be triggered and the bears will take control of the market. In such a scenario, the support on charts is expected to be around 41,800 - 40,600. Given the current scenario, the best trading strategy for traders would be to sell or book profits on the rise with a stop loss of 44,300.

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