Budget 2024: Nifty Financial Services bearish on charts; check key levels

Nifty Financial Services Index Analysis

The Nifty Financial Services Index is currently showing a downtrend on the charts, with the near-term outlook appearing bearish. Given that today is the Union Budget day, one can expect increased volatility in the market. As per the chart pattern, the trend is lower, indicating potential underperformance.

If the index breaks and trades below the crucial level of 23,400, it would trigger a short sell, signifying a negative breakout on the charts. The first significant support on the charts is at 22,500, and it is important to closely monitor this level. On the upside, the index has an expected resistance level at 24,350, but this is contingent on the index breaking the 23,850 level on a closing basis.

 

Considering the current market conditions, the best trading strategy would be to exercise caution regarding fresh buying. Traders should focus on selling on the rise or booking profits on existing positions in this index. It is advisable to wait for the correction to complete before making new purchases.

Buying should be considered only around the support levels identified at 22,500 to ensure a favorable risk-reward ratio. In summary, the Nifty Financial Services Index is experiencing a bearish trend, with critical support and resistance levels identified at 23,400 and 24,350, respectively. Today's Union Budget adds a layer of volatility to the market, emphasizing the need for caution.

Traders and investors should adopt a strategy of selling on rises and booking profits, while waiting for the index to reach the support level before considering fresh buying. By following these guidelines, market participants can effectively navigate the current conditions and make informed investment decisions.

Nifty PSU Banks Index Analysis

The Nifty PSU Banks Index is currently range-bound on the charts, trading within a defined range of 7,150 to 7,500. A close above or below this range would trigger a directional move. Resistance on the charts is identified at 7,800, while support levels are at 6,900 and 6,450.

Given the current range-bound movement, trading in this index and its constituents is not advisable until a breakout occurs. For those willing to take on more risk, a potential strategy could be to buy near the support levels and sell near the resistance levels, and vice versa.

This approach allows traders to capitalize on the established range while being mindful of the potential breakout points.

(Disclaimer: Ravi Nathani is an independent technical analyst. Views are his own. 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.)