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Nifty 50 Index
Last close: 17,828
Bias: Buy on dips
Following a meticulous analysis of the NIFTY 50 index, it has been discerned that the level of 17,858, which signifies 50 per cent of the last swing, is poised to act as a formidable resistance level in the foreseeable future.
This implies that it is likely to be a crucial threshold that must be breached for a potential bullish breakout to occur. In essence, surpassing this resistance level is necessary for the index to exhibit superior performance. In the event of breaching this resistance level, the subsequent resistance levels to monitor would be 18,100, 18,449, and 18,650, which could serve as potential targets for further upward movement, presenting an opportunity for bullish traders to capitalize on.
On the downside, the index is projected to find support around 17,610, 17,325, and 17,025, which implies that these levels are anticipated to act as a buffer against downward momentum.
Consequently, adopting a strategy of buying on dips, and capitalizing on near-term corrections, could be a judicious approach for swing traders. This strategy entails accumulating positions during market pullbacks, taking advantage of the potential support levels mentioned above.
Furthermore, the bullish trend indicated on the charts for the short term reinforces this approach. It suggests a favorable market sentiment for potential upside movement, providing additional support to the strategy of buying on dips.
In conclusion, the analysis of the NIFTY 50 index suggests that the level of 17,858 is expected to act as a formidable resistance level, and breaching this level could potentially trigger a bullish breakout.
The subsequent resistance levels to watch for are 18,100, 18,445, and 18,650. On the downside, the index is projected to find support around 17,610, 17,325, and 17,025, which presents opportunities for swing traders to employ a buying-on-dips strategy.
The bullish trend indicated in the short term further supports this approach. However, it is crucial for traders to exercise caution and stay updated with market developments for informed decision-making in their trading activities.
NIFTY IT Index
Last close: 28,343
NIFTY IT Index, currently trading at CMP 28342.80, is showing signs of strong support on the charts around the level of 28,200. In the event of a violation of this level, which would also be considered as the last hope for bullish traders, it is expected that the index may face further downside and open doors for the range of 27,950 - 27,800 and 27,350 - 27,275 as potential support levels.
If the index approaches these range levels, it is recommended for investors and swing traders to consider accumulating the index and its constituents, as the index is expected to outperform in the mid-term and these levels present attractive accumulating opportunities.
The trade plan based on the technical analysis is summarized in the following points:
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Near-term support: 28,200
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If a support level of 28,200 is violated, the next expected support range would be between 27,950 - 27,800 and 27,350 - 27,275
- Investors and traders could consider trying to accumulate during these support range levels
In conclusion, it is recommended to wait for the level of 28,200 and observe if it is violated. If the support is breached, it may be prudent to sell on any subsequent rise and target the support levels mentioned above.
However, once the index starts trading within the mentioned support range, it could present a buying opportunity for the mid-term accumulation of the index and its constituents. It is important to closely monitor the price and make informed trading decisions based on the latest technical analysis and market conditions.
(Ravi Nathani is an independent technical analyst. Views expressed are personal).
