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Nifty 50 Index
Last close: 22,326.90
The Nifty 50 Index, currently trading at 22,326.90, has displayed a pattern of lower lows in the short term, indicating a potential bearish trend. However, confirmation of this trend reversal would require a break below the recent low of 21,710. Such a move could trigger panic selling and suggest further downside potential. Conversely, a breakout above the level of 22,527 would invalidate the possibility of a lower high formation, potentially signaling a bullish reversal.
In this scenario, the next resistance levels to watch for would be at 22,564 and 22,775. For short-term traders, it's crucial to consider these breakout levels (22,527 and 21,710) as key reference points. Closing above or below these levels could provide clear signals for the direction of the index.
Additionally, for day and swing traders, it's essential to monitor the immediate support and resistance levels. Resistance levels are anticipated at 22,480, 22,550, and 22,640, while support levels are expected at 22,164, 22,100, 22,016, 21,750, and the critical level of 21,710.
Given the current market conditions, the best trading strategy would be to buy near support levels and sell near resistance levels until a definitive breakout is observed on the charts. This approach allows traders to capitalize on short-term price movements while minimizing risk. It's essential to remain vigilant and adjust trading strategies based on the evolving market dynamics and price action.
Nifty Mid Cap Select Index
Last close: 10,525.30
The Nifty Mid Cap Select Index, currently trading at 10,525.30, is exhibiting a downtrend in the near term, as indicated by various technical indicators such as MACD, EMA's, and RSI.
In light of this bearish sentiment, the recommended trading strategy is to sell on rallies near the resistance levels. Resistance levels to watch for are anticipated at 10,580, 10,640, and 10,750. These levels represent potential selling opportunities as the index is expected to face downward pressure from these points.
Conversely, support levels are expected at 10,464, 10,325, and 10,060. These levels may provide some cushion for the index in case of downward movements but are not expected to hold strong against the prevailing bearish sentiment.
Traders should exercise caution and closely monitor price movements near these support and resistance levels. Selling near resistance levels and taking profits at support levels aligns with the current downtrend observed in the index.
It's essential for traders to remain vigilant and adapt their strategies based on real-time market conditions and price action. Additionally, risk management techniques such as setting stop-loss orders can help mitigate potential losses in volatile market conditions.
(Ravi Nathani is an independent technical analyst. Views expressed are personal).
