Buy Nifty PSU Bank at this support; Nifty FMCG strategy eyed in this range

As per Ravi Nathani, adopting a buy-low, sell-high strategy for Nifty FMCG within the established range is the most prudent course of action

Nifty FMCG Index Range bound on charts

The Nifty FMCG Index has been treading within a confined range for the past two months, oscillating between 52,900 at its peak and 50,900 at its trough, representing a fluctuation of about 2000 points. This period of lateral movement has captured the attention of market observers and traders alike.

A significant observation emerges: a closing price either above or below this range would signify a breakout in the short-term charts, indicating potential shifts in market dynamics.

Given the current scenario, the optimal trading strategy remains relatively straightforward. Traders are advised to consider buying when the index hovers close to the lower limit of this range and selling when it approaches the upper threshold.

 

This strategy, based on historical price action, mitigates risk and aligns with the market's prevailing trend. For risk-tolerant traders, there is an opportunity to accumulate the index, considering its proximity to the lower boundary.

A cautious approach involves setting a stop-loss at 1 per cent below this lower limit, safeguarding against unexpected downturns. In terms of potential gains, the resistance levels of 51,900, 52,400, and 52,900 provide clear targets for traders to focus on.

In summary, the Nifty FMCG Index's current behavior necessitates a vigilant approach from traders. Until a decisive breakthrough occurs, adopting a buy-low, sell-high strategy within the established range proves to be the most prudent course of action.

Strategic Moves: Decoding the Nifty PSU Bank Index Trends

The Nifty PSU Bank Index is currently following a downward trend in the near term. It is anticipated that a crucial support level will emerge around 4,650. At this level, both swing traders and long-term investors are advised to consider accumulating the index and its constituents.

For individuals engaged in swing trading and long-term investments, it is crucial to closely observe the market until the index reaches the expected support level of 4,650.

Once this level is attained, it presents a favorable opportunity to accumulate the index and related assets. To mitigate potential risks, setting a stop loss at a close below 4,550 is recommended.

This precautionary measure helps protect investments in case of unexpected market downturns. Furthermore, traders should be watchful for opportunities when the index approaches the projected support level of 4,650.

During this period, investors can enter the market and buy the index, capitalizing on the advantageous price point. This strategic move enables investors to make purchases at a favorable rate, potentially maximizing their returns in anticipation of a future market upswing.

In summary, the prevailing downtrend in the Nifty PSU Bank Index suggests a cautious approach for traders. By vigilant observation and decisive action around the support level of 4,650, traders and investors can strategically position themselves, optimizing their investment decisions amidst the current market conditions.

Disclaimer: Ravi Nathani is an independent technical analyst. He does not hold any positions in the Indices mentioned above and this is not an offer or solicitation for the purchase or sale of any security. It should not be construed as a recommendation to purchase or sell such securities.