Sell Nifty Metal on the rise, support at 9,500; more details here

Nifty Metal Index Analysis
 

The Nifty Metal Index is currently in a phase of consolidation, trading within a narrow range of 300 points, specifically between 9,700 and 10,000. A breakout above or below this range would trigger a directional move. However, given the current technical indicators and chart patterns, it is advisable to book profits or sell on rises in this index and its constituents.

The expectation is that the index will underperform in the near term, indicating a likely pullback. Support levels on the charts are anticipated around 9,500, 9,160, and 8,900. 

Fresh purchases should only be considered near these support levels, particularly for short-term or swing traders. This strategy aims to capitalise on the expected pullback and ensures that entries are made at more favourable prices, thus improving the risk-reward ratio. By waiting for the index to reach these support levels, traders can position themselves better for potential upward movements once the pullback phase concludes. Given the consolidation within the narrow range and the overbought condition of technical indicators, it is prudent to adopt a cautious approach. 

 

Selling on rises helps to lock in profits and avoid potential downturns. This disciplined approach not only preserves capital but also prepares traders to take advantage of the next bullish phase at more advantageous prices.

Nifty Realty Index Analysis
 

The Nifty Realty Index is currently displaying a downward trend on the charts. A fresh breakdown is expected if the index closes below 1,085. This level serves as the final stop-loss for all near-term and short-term bullish positions. If the index violates this support level, the next support levels on the charts are anticipated at 1,050 and 1,025. 

Given this outlook, the best trading strategy for the near and short term, as well as for swing traders, would be to sell on rises with a strict stop-loss set at 1,160 on a closing basis. This approach helps to manage risk effectively while taking advantage of potential downswings. The level of 1,085 should be closely monitored as it acts as a critical support. 

If this level is breached, it would signal a fresh round of selling. In summary, both the Nifty Metal and Realty Indices are expected to face near-term challenges. The Metal Index is likely to experience a pullback, making it advisable to book profits or sell on rises. On the other hand, the Realty Index is poised for further downside if it breaks below the key support level of 1,085. 

Traders should adopt a cautious approach, locking in profits and waiting for more favourable entry points to maximise potential gains and manage risks effectively. This strategy not only protects against short-term volatility but also positions investors to benefit from subsequent market recoveries.

(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.)