Renowned market analyst Ravi Nathani has outlined strategic trading approaches for the Nifty Financial Services and Nifty Bank indices, highlighting opportunities amid their current market dynamics. His insights emphasise cautious yet calculated moves, leveraging the indices’ technical levels and trends.
Nifty financial services index: A buy-on-dips opportunity
The Nifty Financial Services index is currently trading within a narrow range of 23,500–23,075, suggesting that a breakout above or below these levels will determine its next directional move. Despite recent short-term corrections, the index remains bullish in the long term, making it an attractive opportunity for traders.
Key Observations and Strategy
- Support Levels: Strong support is at 23,075, with a strict stop-loss at 23,000 on a closing basis to manage downside risks.
- Resistance Levels: Upside targets include 23,500, followed by 23,800 and 24,200, aligning with potential recovery from oversold conditions.
- Technical Outlook: The index has reached a critical support zone after a sharp correction, signalling a potential rebound. Long-term bullish momentum backs this outlook.
Ravi Nathani suggests adopting a buy-on-dips strategy as the index appears oversold. “This is a good accumulation point for disciplined traders aiming to capitalise on short-term gains,” he noted.
Recommended Trading Plan
- Entry Point: Accumulate positions near 23,075.
- Stop-Loss: Maintain a strict stop-loss at 23,000.
- Targets: Aim for 23,500, 23,800, and 24,200.
The overall sentiment favours cautious accumulation at lower levels, underpinned by disciplined risk management. Traders are encouraged to monitor key levels closely, as a decisive move could further confirm the index’s recovery trajectory.
Nifty bank Index: patience for a breakout
The Nifty Bank index is currently trading in a consolidation phase, confined to the range of 50,650–49,800. This range-bound activity reflects the market’s indecision and necessitates a patient approach from traders awaiting a breakout.
Key Observations and Strategy
- Resistance Levels: A close above 50,650 could unlock further upside potential, with resistance at 51,000, 51,425, and 52,450.
- Support Levels: On the downside, a breach of 49,800 could lead to additional pressure, with further support at 49,550 and 48,950.
- Technical Indicators: Neutral indicators suggest that traders should await confirmation of a breakout before committing to significant positions.
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Recommended trading plan
- Range-Bound Strategy: Risk-averse traders should wait for a decisive breakout from the range to establish a clear trend.
- Risky Trades: Aggressive traders may consider a buy-near-support, sell-near-resistance approach to benefit from smaller price movements within the range.
According to Nathani, “Patience is key. Traders should prioritise disciplined risk management and avoid overexposure until a clear breakout emerges.”
Conclusion and trading insights
For Nifty Financial Services
The index presents a compelling buy-on-dips opportunity, supported by its oversold status and long-term bullish momentum. Maintaining a strict stop-loss and targeting key resistance levels can yield favourable outcomes.
For nifty bank
The index’s consolidation phase underscores the importance of patience and strategic positioning. While range-bound strategies may benefit aggressive traders, a confirmed breakout is essential for determining the next significant trend.
By closely monitoring critical levels and adopting a disciplined trading approach, investors can navigate these indices effectively, capitalising on potential opportunities in India’s financial market recovery.
