Nifty Pvt Banks index may weaken; avoid shorting PSU Bank index

According to Ravi Nathani, an independent technical analyst, the short-term trend for the Nifty PSU Bank Index is bullish, indicating a positive outlook in the near term.

Nifty Pvt Banks Index

The Nifty Pvt Banks Index is currently trading at a CMP (Current Market Price) of 22,291.10. Since the beginning of this month, the index has been experiencing a phase of consolidation near its all-time high levels.

The consolidation range for this period is observed between 22,675 and 22,025. A close above or below this range would act as a trigger for the next directional move. It is worth noting that the pivot levels, which are significant technical indicators, align closely with the lower range of consolidation.

Therefore, a close below 22,025 would initiate a sharp decline towards the S1 level of the Pivot, which is approximately 21,735. The Relative Strength Index (RSI), which measures the momentum of the index, indicates a downward trend and is currently trading close to the 50 mark. If the RSI breaks below 50, it suggests a possible bearish trend in the near term.

 

Considering the overall chart pattern and the indicators, the index is expected to continue consolidating within the mentioned range until a breakout occurs.

Therefore, the recommended trading strategy would be to buy near the support levels and sell near the resistance levels. For the current week, the support and resistance levels are as follows:

Resistance: 22,600 – 22,750 – 22,900

Support: 22,225 – 22,050 – 21,800

Nifty PSU Bank Index

The Nifty PSU Bank Index is currently trading at a CMP (Current Market Price) of 4,081.70. It is expected to face a significant resistance level around 4,110. If the index manages to break above this level, it could potentially rally further up to 4,136.

On the downside, there is support expected on the charts at 4,035, followed by 3,985 and 3,935. These levels are likely to provide a support base for the index in case of any downward moves.

The short-term trend for the index is bullish, indicating a positive outlook in the near term. Therefore, a recommended trading strategy would be to buy on dips near the support levels.

This means looking for opportunities to enter the market at lower prices during temporary pullbacks. It is advisable to avoid short selling or betting on a decline in the index when it is in an upward trend.

(Ravi Nathani is an independent technical analyst. Views expressed are personal).