Time to book profits in Nifty50, Midcap Select index? What charts reveal

Nifty 50 Index Analysis:

The Nifty 50 Index is currently trading at 23,501.10. In the near term, the index is trading within a range of 23,700 to 23,300. A close above or below this range would trigger a directional move. Given the current market conditions and the signals from technical indicators such as RSI, Stochastic, and MACD, the best trading strategy would be to sell on rises.

The technical indicators are showing signs of a potential correction on the charts, suggesting that the index might face downward pressure. Therefore, it is advisable to adopt a sell-on-rise strategy, as this would allow traders to capitalize on potential dips in the index.

 

Key support levels to watch on the charts are 23,100, 22,900, and 22,600. These levels are expected to act as support in the near and short term. If the index moves below the lower boundary of the current trading range (23,300), it could test these support levels, providing potential profit opportunities for traders who have taken short positions.

In summary, given the bearish signals from technical indicators and the current trading range, the recommended strategy for the Nifty 50 Index is to sell on rises. Traders should monitor the support levels at 23,100, 22,900, and 22,600 for potential targets in the near and short term. This approach aligns with the expected correction and helps manage risk effectively.

Nifty Midcap Select Index Analysis:

The Nifty Midcap Select Index is currently trading at 12,151.95. Given the near and short-term market conditions, the index is exhibiting overbought characteristics as indicated by multiple technical indicators.

As a result, the best trading strategy at this juncture would be to sell on rises or book profits at the current market price (CMP). This approach is recommended due to the anticipation of profit booking in the near term.

The support levels to watch on the charts are 11,800, 11,625, and 11,500. These levels are expected to provide significant support during any corrective phase.

For swing traders and investors, it is advisable to plan fresh positions only if the index falls below 11,500. This level would present a more favorable entry point, aligning with the overall uptrend, and providing a better opportunity for accumulation.

In summary, due to the overbought conditions and the likelihood of profit booking, the recommended strategy for the Nifty Midcap Select Index is to sell on rises or book profits at CMP. Traders should monitor the support levels at 11,800, 11,625, and 11,500.

Fresh positions should be considered only below 11,500, allowing for accumulation during the expected pullback in this ongoing uptrend. This approach helps in managing risk and maximizing potential returns.

(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.)