Chart check: Wait for dips in Nifty FMCG; book out profits in Nifty Energy

Traders are advised to exercise patience and wait for opportune moments to capitalize on potential price dips in Nifty FMCG and its stocks, says Ravi Nathani

Nifty FMCG Index: Patience for a Brief Correction Presents Buying Opportunity

The Nifty FMCG Index is currently portraying a short-term bullish trend on the charts, indicating positive market sentiment. However, a closer look at the near-term scenario suggests an imminent period of consolidation characterized by a negative bias.

During this consolidation phase, the index is expected to find support around the 53600 level, which coincides with the 10-day exponential moving average (10DEMA).

Acknowledging the overarching bullish trend, traders are advised to exercise patience and wait for opportune moments to capitalize on potential price dips.

The proposed strategy involves monitoring the support level of 53600 and strategically entering the market when the index approaches or touches this level. This patient approach aligns with the anticipation of a short-term correction within the broader bullish trend.

 

The targeted buying opportunity near the support level is aimed at maximizing gains as the index rebounds. With a short-term target set at 55,300, traders can strategically position themselves to benefit from potential upward movements.

This cautious and selective strategy allows traders to navigate the market effectively, balancing the prospect of gains with a keen awareness of the ongoing consolidation phase and negative bias in the near term.

Nifty Energy trading in overbought zone

The Nifty Energy Index is currently trading in the overbought zone, indicating a scenario where the price has experienced a sharp rally in both the near term and short term.

In light of this, the optimal trading strategy for this index is to book profits at the current market price or on upward movements. Stiff resistance on the charts is anticipated around 32600.

Technical indicators like the Relative Strength Index (RSI) and Stochastic suggest that the index is in an overbought condition. This implies that profit booking is likely to occur at higher levels.

Traders are advised to exercise caution and avoid short selling, given that the overall trend is bullish. For those considering fresh buying opportunities, it is recommended to wait for a pullback to near support levels.

These support levels are expected to be around 30400 and 29800. Traders should patiently observe the market and initiate new bullish positions only when the index approaches these support levels.

Until then, the prudent strategy is to book profits at the current market price and remain in a cash position.

Disclaimer: Ravi Nathani is an independent technical analyst. 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.