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Nifty IT Index
The Nifty IT Index, which last closed at 36,946, is currently indicating a downtrend in the near term, as observed on charts. Additionally, technical indicators such as MACD and RSI are not supporting bullish sentiments.
Traders should pay close attention to the level of 36,650. If the IT Index trades below this level, it may trigger bearish momentum, potentially leading to a decline towards the level of 36,225.
Further downward movement could bring the index into oversold territory, with expected levels between 35,775 and 35,465.
Given the prevailing market conditions, the recommended trading strategy is to sell on rallies, with a stop-loss set at 37,100.
This approach allows traders to capitalize on potential downward movements while managing risk effectively. In summary, the Nifty IT Index is currently in a downtrend, and traders should monitor the critical level of 36650.
Selling on rallies with a designated stop-loss aligns with the market outlook and provides traders with a strategic approach to navigate the current conditions.
Nifty Auto Index
The Nifty Auto Index, which last closed at 20,338, is indicating a downtrend in the near term, as observed on charts. A fresh round of selling pressure is anticipated only if the index trades and closes below the critical level of 20,180.
Should this level be breached, it could trigger panic selling, potentially driving the index to even lower levels on the screen, around 19980 and 19525.
Technical indicators such as RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are currently showing downward trends, further reinforcing the expectation of underperformance in the near term.
Consequently, the recommended trading strategy for traders is to either sell on rallies or stay in cash.
Selling on rallies allows traders to capitalize on potential downward movements while managing risk effectively. Alternatively, staying in cash provides flexibility and allows traders to avoid unnecessary exposure to market volatility.
In summary, the Nifty Auto Index is currently in a downtrend, and traders should closely monitor the critical level of 20,180.
Selling on rallies or staying in cash are prudent trading strategies given the expected underperformance in the near term and the potential for further downward movements in the index.
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.
