Nifty FMCG, Nifty Energy: Sell on rise amid likely correction ahead

The anticipated profit booking in Nifty FMCG is expected to continue until the index reaches support levels at 53,681 and 53,100, says Ravi Nathani

Nifty Energy Index: Anticipating Correction After Recent Highs

The Nifty Energy Index, currently positioned at 32,151.60, is exhibiting signals on the charts that suggest a notable correction in the near term.

Following the correction observed in the previous trading session, it becomes evident that a short-term top is in place, indicating a potential downtrend in the coming sessions.

The recommended trading strategy in this scenario is to consider selling on upward movements, incorporating a stoploss set at the current swing high of 33575 on a closing basis.

The downside targets for this strategy are identified at 30620 and 29700, representing potential support levels where the correction might find stability.

 

Supporting the bearish outlook, technical indicators like MACD (Moving Average Convergence Divergence) are on the verge of signaling a negative bias.

Additionally, the near-term moving averages, such as the 10-day and 20-day EMAs (Exponential Moving Averages), are exhibiting a flat pattern post a sharp upward move, further signaling a potential underperformance in the near and short term.

For investors, the suggested approach is to book profits on upward movements, taking advantage of the recent highs. On the other hand, traders may find opportunities by initiating short positions, aligning with the identified downside targets.

In summary, the Nifty Energy Index is showing indications of an anticipated correction after recent highs. Traders and investors are advised to carefully navigate these conditions, incorporating risk management strategies and aligning their positions with the identified support levels on the charts.

This approach enables market participants to adapt to changing dynamics and make informed decisions based on the signals provided by technical indicators and price action.

Nifty FMCG Index: Profit Booking Anticipated

The Nifty FMCG Index, currently at 54,598, recently achieved a fresh lifetime high; however, a sharp profit booking is underway, and indications suggest that this trend is likely to persist.

Traders are advised to consider selling on upward movements or booking profits at the current market price.

The anticipated profit booking is expected to continue until the index reaches support levels at 53,681 and 53,100.

This downward movement aligns with the signals provided by key technical indicators such as RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), and Bollinger Bands.

The identified technical indicators collectively indicate an underperformance in this sector for the foreseeable future. Traders should exercise caution and implement appropriate risk management strategies in response to the current market conditions.

In summary, the Nifty FMCG Index is undergoing a phase of profit booking after achieving a fresh lifetime high.

Traders are encouraged to stay vigilant, considering selling opportunities on upward movements and managing their positions in line with the expected support levels.

This approach enables traders to navigate the market effectively and make informed decisions based on both technical indicators and observed price action.

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.