Ravi Nathani sees buying opportunity in Nifty; cautions on midcap select

Nifty index poised for a bullish comeback

The Nifty index, currently trading at 23,532.7, has undergone a sharp short-term correction, pushing it into oversold territory. This decline has brought the index close to a critical support zone between 23,481 and 23,464, where stabilisation is likely. 

 

The broader trend remains bullish, making the current correction a strategic buying opportunity for short- and medium-term traders. 

 

Technical indicators such as RSI, MACD, and stochastic are all signaling oversold conditions, suggesting the potential for a technical rebound. Recovery from these levels could drive the index toward immediate resistance levels at 24,125 and 24,550, targets that are attainable by the end of the month if buying momentum resumes. 

 

 

Traders are advised to adopt a 'Buy-on-dips' strategy, accumulating positions within the support range. A strict stop loss at 23,350 on a closing basis should be maintained to mitigate risk. The anticipated recovery aligns with improving technical momentum and broader market sentiment. The recent correction, while steep, appears to be a healthy retracement within an overall bullish framework. 

 

This creates an opportune moment for traders to enter the market at discounted levels. A bounce from the current oversold conditions is likely to restore the index's upward trajectory, offering attractive short-term gains for disciplined traders. 

 

In conclusion, the Nifty index is poised for a potential rebound, making this an ideal time to position upside targets while adhering to strict risk management protocols.

 

Nifty midcap select index: Cautious approach as correction persists

The Nifty midcap select index is currently facing downward pressure on the charts, with the near-term trend indicating further weakness. The index has a critical support level of 11,800, which serves as a key threshold for bullish positions. A close below this level could trigger a fresh wave of selling, potentially driving the index down to correction levels around 10,800. 

 

Given this bearish outlook, the recommended strategy is to exercise caution. Avoid entering fresh long positions at current levels and wait for the correction to complete. If the index holds above 11,800 for a day or two, traders may consider accumulating positions near this support level with a strict stop-loss below 11,800 on a closing basis. On the upside, resistance levels are anticipated at 12,250 and 12,500. These levels could provide profit-booking opportunities for traders once the index stabilizes and exhibits signs of recovery. 

 

At present, the index's downward momentum, combined with the lack of immediate bullish signals, suggests that patience is key. Traders are advised to monitor the critical support level at 11,800 closely. A bounce from this level could signal the end of the current correction, offering a potential buying opportunity. 

 

In summary, the Nifty midcap select index remains under pressure, and traders should wait for clear signs of stability before initiating new positions. This cautious approach will help navigate the ongoing correction while minimising risks.  (Ravi Nathani is an independent technical analyst. Views expressed are personal.)