Nifty Bank Index
The Nifty Bank Index is also in a bullish trend on the charts but is nearing a critical resistance zone between 52,275 and 52,575. This zone is expected to act as a near-term top, and traders should consider booking profits as the index approaches these levels. The index is likely to face selling pressure here, leading to a potential pullback. Once the anticipated pullback occurs, traders should look to accumulate the index and its constituents around the support levels of 51,280, 50,964, 50,664, and 50,225. These levels are ideal for re-entry, providing favourable opportunities for traders to position themselves for the next bullish wave.
Patience will be key in this scenario, as waiting for the index to retreat to these support levels will minimise risk while optimising future gains. By following this strategy, traders can effectively manage their exposure, booking profits at resistance levels and waiting for pullbacks to accumulate positions for the next upward move.
Overall, the Nifty Bank Index remains bullish in the long term, but caution is advised as the index nears key resistance zones, signalling the potential for short-term corrections.
Nifty Private Bank Index
The Nifty Private Bank Index is currently experiencing a strong bullish trend, with significant gains recorded over the past fortnight. However, it is now nearing an overbought zone, signalling the potential for profit booking in the near term. Key resistance levels on the charts are expected between 26,265 and 26,450, where traders are advised to book profits and secure recent gains.
As the index approaches this resistance zone, traders should be cautious. For those looking to initiate short positions, it is crucial to maintain a strict stop-loss at 26,650 on a closing basis, as a close above this level could indicate a continuation of the bullish trend and invalidate the short position. Short-term traders seeking opportunities may consider short-selling as the index reaches the overbought levels, taking advantage of the expected correction.
On the downside, key support levels are anticipated at 25,736, 25,550, 25,380, and 25,000. These levels provide attractive accumulation points after a correction, where traders can look to re-enter the market for short-term gains. By adopting a cautious approach and booking profits on the rise, traders can effectively manage risk and position themselves for fresh buying opportunities as the index stabilises at these lower levels.
(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.)
First Published: Sep 18 2024 | 7:22 AM IST
