Nifty IT rangebound, FMCG bullish in near term: Here's how to trade

Nifty IT Index

The Nifty IT Index is currently consolidating between 34,000 and 33,000 following a sharp correction, suggesting a range-bound movement in the near term. 

Given this context, the best trading strategy would be to buy near the support level of 33,000 and sell near the resistance level of 34,000. 

For buying near support, an entry point around 33,000 with a target of 34,000 is advisable, placing a stop-loss just below 33,000 to manage risk effectively. 

Conversely, for selling near resistance, an entry point around 34,000 with a target of 33,000 is recommended, setting a stop-loss just above 34000 to limit potential losses.

 

Key levels to watch include the resistance at 34,000, with an extended target of 34,700 if a breakout occurs, and the support at 33,000, with a deeper support level at 32,500 if the index breaks below the consolidation range. 

If the index breaks above 34,000, the next resistance to monitor is 34,700. Conversely, if the index breaks below 33,000, the next support level to watch is 32,500.

In summary, the near-term strategy involves trading within the 34,000-33,000 range by buying near support and selling near resistance. 

Additionally, traders should monitor 34,000 for an upside breakout and 33,000 for a downside breakout, with subsequent key levels at 34,700 and 32,500. 

By following these strategies, traders can effectively navigate the consolidation phase and be prepared for potential breakouts in either direction.

Nifty FMCG Index 

The Nifty FMCG Index is showing a bullish trend on the charts, with the potential for a fresh bullish breakout if it closes above 55,500. The support levels to watch on the downside are 54,500 and 53,800. Given this context, the best trading strategy is to buy on dips. 

This means entering the market around the support levels, specifically at 54,500 or 53,800, to capitalise on the bullish trend. 

Traders should keep an eye on the 55,500 level, as a close above this point would signal a strong bullish breakout, indicating further upward momentum.

(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.)