 "A man talks on phone at the National Stock Exchange as its new logo for for the benchmark Nifty50 is seen on a glass-wall, in Mumbai")
A man talks on phone at the National Stock Exchange as its new logo for for the benchmark Nifty50 is seen on a glass-wall, in Mumbai
The Nifty Index has formed its first red candle on the daily charts, signaling a shift in momentum as some bearishness and profit booking have started to emerge. After a strong performance over the past fortnight, the index has rallied sharply, leading to overbought conditions in multiple technical indicators.
This suggests that the market may be poised for a short-term pullback or underperformance. Support on the charts is expected at 25,920, 25,700, and 25,350. These levels are likely to provide opportunities for fresh buying as the risk-reward ratio will be more favorable once the index corrects.
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The best trading strategy would be to book profits at the current market price (CMP) and wait for a pullback before re-entering long positions near the mentioned support levels. Although the index remains in a broader uptrend, traders should avoid short selling, as the long-term trend continues to be bullish.
Waiting for a pullback dip and buying near support levels will help manage risk more effectively. Patience is key in this environment, and traders should focus on accumulating long positions when the market provides better entry points.
Nifty Midcap Select Index: Bullish Trend with Caution
The Nifty Midcap Select Index is showing a bullish trend on the charts, indicating strength in the near term. The ideal trading strategy for this index is to buy on dips, with a strict stop-loss set at 13,200. The expected targets for the bullish move are 13,400 and 13,525, making this a favorable trade setup for risk-tolerant traders.
However, there is a note of caution. Technical indicators suggest that the index is in an overbought zone, increasing the chances of a short-term pullback. Risk-averse traders may prefer to wait for a deeper correction, ideally near the 12,800 level, before entering fresh bullish positions.
This strategy would provide safer entry points while maintaining a positive outlook on the overall trend. For more aggressive traders, buying at the current levels or on dips may offer upside potential, but it is essential to manage risk by adhering to a strict stop-loss. Safe traders should wait for a correction before making any substantial commitments.
Both the Nifty and Nifty Midcap Select indices are showing signs of a potential pullback after strong rallies. For the Nifty Index, the strategy should be to book profits and wait for a correction to the support levels before re-entering long positions. In contrast, the Nifty Midcap Select Index remains bullish, but caution is advised due to overbought conditions.
Risk-tolerant traders can buy on dips with a stop-loss at 13,200, while more conservative traders should wait for a correction to around 12,800 before initiating long positions.
First Published: Sep 30 2024 | 7:40 AM IST
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