Nifty IT, Auto, Pharma show weakness on charts: Here's what analysts say

Nifty IT Index: Short-Term Weakness, Sell on Rise Strategy Recommended

The Nifty IT Index currently exhibits a downtrend, with support levels anticipated at lower points. If the index breaches 41,100, additional support levels are projected at 40,800, 38,950, and 37,500.  Given the formation of a weakening pattern, a cautious approach is advised, with the best strategy being to sell on any rise and hold off on fresh investments until the trend stabilizes. Traders and investors might consider staying in cash for the near term, avoiding exposure to this sector until a clear bottom is established.

 

Nifty Auto Index: Downtrend with a Possible Technical Bounce

 

The Nifty Auto Index shows a predominantly bearish outlook in the short term, though a small technical bounce might occur. Resistance is likely around 24,500, making this a strategic level to initiate short positions. The support level for this downtrend lies near 22,500, indicating a potential lower target. The best approach for traders would be to sell on any upward movement, leveraging the minor bounces while maintaining a bearish view overall.

 

Nifty Pharma Index: Continued Downtrend, Cautious Approach Suggested

The Nifty Pharma Index is also in a downward trend, with support expected at around 21,625. For both traders and investors, the preferred strategy would be to sell on any rise, as there is limited upside momentum currently. A conservative approach—staying in cash—is advisable for this sector to avoid potential losses as the index continues to show weak technical signals. It’s prudent to wait for further clarity on the trend before considering re-entry into this index or its constituents.

 

Summary

In summary, the Nifty IT, Auto, and Pharma indices are all exhibiting short-term downtrends, and the technical indicators suggest limited upside potential. The advised trading strategy across these indices is to sell on any rises and, where feasible, to stay in cash. For Nifty IT and Nifty Pharma, support levels are expected at lower points, emphasizing the importance of patience before re-entering these sectors. Nifty Auto could see a minor bounce but remains bearish overall. This conservative approach across the three indices is aimed at preserving capital in a market currently tilted towards weakness in these sectors.